Business Adviser

Beyond the numbers: the evolving leadership role of the CFO

Submitted by the Canadian Financial Executives Research Foundation

While CFOs have usually climbed the corporate ladder on the strength of their technical skills, it is widely acknowledged that their role has now grown from that of a mere “numbers” person. Today’s CFOs are expected to move beyond their financial responsibilities by providing strategic business advice to the management teams they serve, including the CEO. This means that they must broaden their skill sets if they want to make a natural progression from technical expert to a client-facing executive leader.

A Canadian Financial Executives Research Foundation study entitled: Beyond the Numbers: The Evolving Leadership Role of the CFO, sponsored by Knightsbridge, showed that CFOs, senior financial executives, and controllers need to take steps to be able to fully meet these new and evolving demands. Published in June, the study is based on an online survey of public and private company CFOs and other senior financial executives, on interviews with CEOs and board members, and on a half day roundtable with representatives of these three groups.

Among the key findings of the study:

• CFOs must now interpret and summarize large amounts of data, highlight key insights, anticipate trends and explain their implications. They must be able to simplify and communicate complex issues for a wide cross-section of audiences.
• CFOs need to find a balance between the roles of critic and advocate in helping the management team objectively evaluate growth initiatives and manage risk and opportunities.
• CFOs need to develop a strong understanding of an organization’s operations, key markets, customers, and generally understand how the company makes money. In order to do this, they must develop strong relationship-building skills.
• CFOs must maintain a high level of integrity in order to earn and maintain the trust of their employees, peers, colleagues, and the CEO.
• CFOs will need to improve their knowledge in the areas of risk management and corporate governance while continuing to support executive decision making.
• CFOs will need to have a better understanding of global markets and the financial implications of doing business across borders.
• CFOs will need to develop the capacity to grow specialized, highly skilled financial teams, and to enhance their leadership skills to increase team effectiveness. They must learn how to establish clear organization and team goals, establish a vision and help their team members appreciate an enterprise-wide perspective. Strong teams with upgraded talent will allow the CFOs to delegate the more technical aspects of their responsibilities so they can focus on strategy.

To get the full study, visit http://www.feicanada.org/page/cferf/cferf2. 

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