Major changes to the CFO’s role have come about in the last 6 years, since EY undertook its first The DNA of the CFO study in 2010. According to a new report titled Do You Define Your CFO’s Role? Or Does it Define You? The disruption of the CFO’s role, the profiles and priorities of finance leaders around the world have diversified as they respond in different ways to major disruptive forces.
The report finds that CFOs find themselves stretched thin, with 51% of the 769 surveyed finance leaders across Asia Pacific, Europe, America and the Middle East reporting that they can’t focus on strategic priorities because they’re busy with operational responsibilities. A similar proportion (52%) cannot focus on strategic priorities by delegating responsibilities because of lack of necessary skills in the finance team. Less than half (47%) say their current nance function does not have the right mix of capabilities to meet the demands of future strategic priorities.
CFOs also believe this demand for an operational focus will increase in the future: 64% agree that they will be increasingly asked to take on wider operational leadership roles beyond finance.
The report also found that delivery of data and analytics will be one of the most critical components for tomorrow’s finance leaders according to 57% of finance leaders surveyed.
A little more than half (58%) of finance leaders say that they need to build their understanding of digital, smart technologies and sophisticated data analytics.
Meanwhile, younger finance leaders are more likely to feel responsible for the ethics of decision making within their organization, with 78% of finance leaders 39 or younger reporting this, but the older generation also feels this responsibility, with 69% stating that they feel responsible.
The study also reveals that the CFO role is being disrupted by digital innovation (according to 58% of respondents), the proliferation of data (57%), a volatile risk environment (57%), increasing regulation and a growing circle of demanding stakeholders (71%).
CFOs who don’t proactively define their role in response to these major forces could compromise their ability to shape strategy with the CEO and drive the innovation necessary for sustainable growth.
“It’s become a job that may be too big for any one individual to do well, given all the responsibilities and the incredible contrast between the day-to-day tactical controllership functions, and the very long-term, strategic, executive functions,” says Tony Klimas, Global Finance Performance Improvement Advisory Leader, EY. “It’s now more important than ever for the CFO to not just to worry about their role, but also the team that they surround themselves with.”