As long as we have business and money, the beans, indeed, need to be counted. A year fraught with challenges, however, has only confirmed what we were already coming to realize: a top level CFO must be more than just a bean counter.
Tomorrow’s … Today’s CFO is a strategic advisor, risk analyst, C-suite collaborator, technologist, and inspiring point person for a remote workforce.
“The CFOs’ work during the pandemic has earned them the right to be strategic leaders in their organizations,” writes Keith Button for CFO Magazine. “The pandemic shined a spotlight on finance chiefs’ ability to lead via an essential and often overlooked task: corporate scenario modeling and planning.”1
The Strategic CFO
It’s not enough for today’s CFO to hand off a wide ranging financial report and be done with it; they must leverage that bird’s eye view to properly assess company risk, opportunity, and strategy. Geo-political, environmental, reputational, and supply chain vulnerabilities must all be parsed and baked into company strategy. The CFO is uniquely positioned to provide this context.
“In a post-pandemic world, there will be no substitute for solid planning and leadership,” says HelpNetSecurity, “and Finance’s role in driving change across the enterprise will be critical to thriving in future disruptions and shaping the organization for success.”2
Joseph Garafalo, Co-Founder of Mosaic agrees.
“The CFO must assume the role of second-in-command to the CEO — the strategic adviser who offers proactive insight into the business,” he writes for Forbes. “For too long, the CFO has had to take a backward-facing approach to the business. Finance teams are constantly using data from previous months and quarters to forecast the future instead of using real-time data. CFOs can’t assume the adviser role without a more proactive approach.”3
Technology in Finance
It should probably go without saying that technology is playing an increasingly key role in finance. The aforementioned insights gleaned from the CFO are largely data-based, meaning that proper collection and analysis require an individual that is fluent in an ever-growing number of systems and platforms. A propensity for continuous learning is essential.
“The CFO should plug into every tool that generates financial data across the business — the list of which gets longer every day,” says Garafolo. “Now, it’s not just the enterprise resource planning and payment systems you have to be fluent in — it’s the customer relationship management, human resource information system, marketing stack, expense reimbursement tools, payment systems, internal product data and the list goes on.3
Remote Teamwork in the Finance Department
While surveys that try to predict the exact portion of finance work that will be handled remotely in years to come vary in their conclusions, what seems clear is that remote work will remain a well-entrenched practice for the foreseeable future, certainly above pre-2020 levels. As the leader of these remote teams, the Chief Financial Officer needs to combine their technological prowess with motivational skills.
Alyssa Evans offers praise for financial leaders who rose to the challenges of the past year.
“The hurdles in 2020 helped Finance improve its soft skills, too,” she writes for CFO Daily News. “Whether it was leading through uncertainty, showing empathy for co-workers, problem solving together or communicating in new ways, you became more thoughtful, well-rounded professionals.”4
ESG in Finance and Accounting
Likewise, Environmental, Social and Corporate Governance (ESG) objectives continue to be of paramount importance in the boardroom. The renewed focus on Diversity, Equity, and Inclusion, along with ongoing environmental concerns, present a challenge to finance departments tasked with quantifying these factors.
“It may seem odd at first to apply measurable values to societal issues, but it is possible. As examples, measurable social metrics for a company include employee turnover, diversity percentages and pay scale ratios,” says Conor Platt, founder and CEO of Confluence Analytics.5
“The world could ultimately be rewarding companies for better behavior and better stewardship of these important risks,” says certified financial planner Marcio Silveira. “And ultimately, higher valuations will result in a lower cost of capital.”5
Failure to ensure good company practices amounts to risk, which makes an accurate accounting of these factors an important part of a CFO’s purview. Unfortunately, subjectivity combined with a lack of consensus and uniformity has made measurement a true test.
“When it comes to ESG reporting, many have said there is a veritable “alphabet soup” of ESG frameworks,” writes Forbes senior contributor Jeff Thomson. “It’s clear the market will require further information that clarifies and defines the key aspects of competing frameworks.”6
The role of the CFO, as I have described, represents not only an evolution, but a current snapshot. As numerous variables continue to reshape the business world on an ongoing basis, the truly successful executive will be the individual who embraces continual evolution and learning not as a prerequisite to be crossed off of a list, but as a way of life to be maintained.