– By Nandita Pai
CFOs’ roles and responsibilities are expanding. Today’s CFOs are donning the two modern hats of strategists and catalysts, which include shaping overall strategy and driving the timely execution of change. This is in addition to the two traditional hats of stewards and operators, which include getting the books right and running a tight finance operation.
The role of CFOs is broadening and requires finance leaders to work closely with businesses and participate in the strategic planning and decision-making. Expectations of other C-Suite leaders from them have never been greater.
This expansion in the roles of CFOs is happening amid heightened macro uncertainty, rising geopolitical tensions and a tighter regulatory landscape.
Per Deloitte’s Asia Pacific CFO Survey 2023, about 86 percent of Indian CFOs said their responsibilities, in terms of expectations from the C-Suite leadership, have broadened during the past two years. We try to shed a spotlight on some of these expectations.
Business enablers: The C-suite leadership wants CFOs who can expand the business and support long-term investments. It expects CFOs to be business enablers and value creators. It looks for support from CFOs as a strategist and catalyst. Aligning the financial strategy with business strategy and driving value creation for stakeholders is crucial for finance leaders.
Digital savvy: Technology is advancing rapidly, and Gen AI is the talk of the town. The C-suite leadership wants to learn from CFOs the use cases of Gen AI and the money required to fund such technologies. It also expects CFOs to weigh in on associated risks, such as data privacy and intellectual property issues. Collaborating with the IT function and helping the C-suite leaders make informed decisions regarding AI integration into the workflow is crucial for finance leaders.
Talent drivers: Talent scarcity has generated a great deal of media concern. Employers are reporting difficulty filling open roles. ManpowerGroup 2024 survey shows that the talent shortage percentage nearly doubled in India since 2021. That is, four in five employers are reporting difficulty finding the right talent today. The trend in finance function does not seem to be any different. The C-Suite leadership expects CFOs to drive talent and close these gaps. It wants CFOs to look beyond the traditional boundaries of finance to bring in talent with expertise in data gathering, analysis and modelling.
Risk managers: One of the key roles of CFOs is mitigating risks. The C-Suite leadership wants CFOs who can manage risks. These risks can be related to business continuity, cyber security, etc. CFOs need to be business enablers; they must also ensure that risk, governance, and compliance are not compromised while driving revenue. CFOs are the gatekeepers of an organisation’s conscience and need to set the tone at the top on ethics and integrity.
ESG champions: Today, climate and sustainability imperatives are taking centre stage and becoming a critical part of organisational agendas. As companies allocate more funds to expand their sustainability initiatives, the C-suite leadership has entrusted CFOs with the unique role of balancing profitability and climate impact. It expects CFOs to put in place adequate processes to drive proactive sustainability initiatives, comply with climate requirements, and be prepared to tackle environmental, social, and governance (ESG) challenges. This underscores the need for CFOs to upskill or add new skills that can help them contribute to the climate imperative, especially from the data governance and data collation capacity.
Well-being advocates: Among the C-suite respondents of Deloitte’s 2023 Workplace Well-being Survey, 85 percent say that they’ll become more responsible for workforce well-being over the next few years, and 89 percent say that their company is advancing “human sustainability”—the notion of well-being as a longer-term and broader priority encompassing climate and society. No wonder well-being has become an essential skill for all C-suite leaders, including CFOs. Today, CFOs are expected to play an influential role in supporting a thriving well-being culture, demonstrate what it means to lead with well-being, and even apply greater focus to maximise the company’s investment in well-being.
Strong communicators: The C-suite leaders frequently address the need for CFOs to be strong communicators. They want to hear stories from CFOs behind the numbers, which should reveal a fresh perspective and deeper understanding. A good practice for CFOs is communicating regularly with other C-suite leaders. CFOs should look at building professional and personal relationships early in their dealings with C-Suite leaders. This could go a long way in building trust and avoiding potential conflicts.
Bottom line
The C-suite’s expectations from CFOs are infinite. From overseeing business operations, driving transformation, managing talent, mitigating risk, advocating well-being, championing ESG to effectively communicating with multiple stakeholders, several demands are placed on CFOs’ shoulders.
The C-suite leadership plays an integral role in running the company’s affairs. Attending to the above expectations by CFOs can help them collaborate with other C-Suite leaders and grow the business sustainably together.
(Nandita Pai is the Partner and CFO Program Leader at Deloitte India.)
(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)