Go Ahead and Remain a Traditional CFO. Just Be the Best You Can Be

The traditional CFO who gets the accounts out and makes sure the company has enough money to pay its bills and fund operations and expansion is dead in the water. That’s the impression you get when you listen to management consultants and actual CFOs themselves.

So it’s refreshing to read in EY’s latest report, Do You Define Your CFO Role? Or Does It Define You?, a measured take on the issue of the CFO’s role in modern business.

“There are three domains in the CFO role: finance, operations and strategy,” says the report. “Many CFOs will have a natural inclination toward one or another of these areas, depending on the skill set, experience, relationships and personal interest.”

In other words, there is still room for a skilled CFO with a firm grasp of finance fundamentals, deal-structuring expertise and a handle on risks and controls – even if he or she may not be highly informed about business operations, do not have strong relationships with business-unit leaders, and is not a big-picture counselor and guide to the CEO.

So long as you are aware of and accept the career limitations of being a traditional CFO, deciding to keep within the confines of that lane is a valid choice

Traditional CFO

The caveat: “That role is in danger of not being seen as part of that core executive group in the future,” Simon Kelly, Outgoing CFO and COO of Australia’s Nine Entertainment, told the EY researchers. “It has the potential to become a service function, because a lot of the traditional role of the CFO is almost a commodity these days.”

That’s fair enough. But so long as you are aware of and accept the career limitations of being a traditional CFO, deciding to keep within the confines of that lane is a valid choice. You just need to be at the helm of finance in a company whose CEO and the board expect no more than expertise in the finance domain. 

And there are still enterprises whose particular needs, at the present time, require that the CFO focus on the finance domain. In certain industries, notes EY, CEOs and boards may ring-fence functions “so the CFO focuses exclusively on core finance responsibilities.” EY did not specify what these sectors are, but they probably include some financial services firms, family-owned companies, tightly regulated enterprises, and start-ups.

Some large conglomerates may also prefer that the CFO focus on finance, given the complexities of capital-raising, budgeting and global regulatory oversight. “Chief strategy officers may limit the opportunities or need for CFOs to move into strategy, and chief operating officers may lighten the CFO’s operating responsibilities,” adds the report.

But EY stresses that the traditional CFO should go beyond just accounting, compliance and reporting, and focus as well on risks and controls, deal-structuring and “acting as the public face of the company on financial performance, including sophisticated communication and influencing skills with stakeholders such as the media.”

“Over the next five years, so many companies won’t have enough capital or will have made wrong acquisitions,” says Jacques Tierny, CFO of digital security company Gemalto, who was one of the finance leaders interviewed for the study. “The CFO will more and more need to be a very skilled corporate finance person.”

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