The evolving role of CFOs - fresh data points to new challenges, and new roles

Aziz Benmalek Profile picture for user Aziz Benmalek October 4, 2022
The role of the CFO goes far beyond holding the purse strings. Aziz Benmalek unpicks the latest study from Sage to understand why this key leadership role needs to be the hub of business information.

Business and economic growth on global business network, Data analysis of financial and banking, Customer service, Technology and data connection, Teamwork, Business strategy and Digital marketing. © PopTika - Shutterstock
(© PopTika - Shutterstock)

Whether it’s politics, business, public health, energy, transportation, or other sectors, our world continues to experience transformational changes (for better and worse) at unprecedented speed. In the business world, these disruptions are only adding to the importance of finance. To be sure, the core DNA of finance – getting the numbers correct – remains as important as ever. But the pace of today’s business means finance leaders cannot be content with simply holding the purse strings and keeping financial records.

Today, savvy CFOs are rapidly cultivating new roles as future-focused strategists and advisors who provide guidance and insights about where the business is headed – not just where it’s been. With real-time analyses, predictive modelling, and smarter forecasting, they’re helping businesses see around corners, rather than looking in the rearview mirror.

Earlier this year, Sage conducted a study with responses from 1,900 finance leaders from around the world across numerous sectors. These leaders work in organizations with fewer than 1,000 employees and revenue of more than $50 million. The overarching takeaway: 83% of the respondents believe a new breed of CFO is needed, one who can step out of the CEO’s shadow and become the hub of business information.

New responsibilities, new opportunities

The Sage survey found new variations – or personas – that are transforming the traditional CFO role by incorporating new skillsets to help guide organizations. Some leaders already conform to these classifications, while others aspire towards them.

  • The Chief Facilitative Officer – Traditional CFOs have been finance purists, but Chief Facilitative Officers get involved in other key areas, such as HR, operations, sales, and marketing. The U.S. is emerging from a year of extraordinary economic regrowth fueled by inventory rebuilds and cash-rich consumers. But in 2022, we’ve seen many signs of deceleration and uncertainty. That’s why strong and decisive Chief Facilitative Officers are in higher demand than ever. Sixty percent of U.S. CFOs view themselves as Chief Facilitative Officer. More CFOs with facilitative traits report they are responsible for digital transformation (81%), strategy and future planning (80%), and IT and technology purchase decisions (78%) than the other two personas.
  • The Chief Fairness Officer – This persona is characterized by empathy and the fundamental understanding that a business is defined by its people, not profits. Connecting math to mood and facts to feelings, the Chief Fairness Officer nurtures employees and guides the organizations toward a more equal future. This is especially true in the U.S., where 79% of finance leaders report their organizations actively encourage them to put purpose over profits, prioritize their people (77%) and account for empathy and understanding when making business decisions (75%).
  • The Chief Future Officer – Modern companies cannot simply observe and react to change. Instead, the CFO must foresee new technologies, identify emerging market shifts, and prepare for the wider economic or political outcomes that could affect their business. The Chief Future Officer focuses on forward-looking issues within – and outside – the organization, including the ability to integrate new and emerging technologies, remote and hybrid work environments, and a lack of diverse talent. These future-focused CFOs are often fully embedded into nearly every facet of business operations (58%), more so than the Chief Fairness Officer (42%) or Chief Facilitative Officer (38%) personas. They also enjoy enhanced collaboration with other executives and leaders.

Embracing innovation

Regardless of which persona you embody, the singularly critical characteristic of today’s CFO is versatility. The modern CFO takes on broader responsibilities, while driving the adoption of wide range of new technologies and initiatives.

  • Digital transformation – The COVID-19 pandemic created an unprecedented (and urgent) pivot to lean digital-centric business models that are now 'table stakes' for many companies. This digital transformation underpins many strategic objectives for today’s CFOs, leading many finance leaders to upgrade their software and technology solutions. They know that integrating emerging technologies into their company and developing new products and services are a strategic imperative. However, fewer than half (47%) say their organizations are prepared to upgrade software, develop new products and services (46%), or integrate new technologies (46%). This readiness gap underscores a major hidden threat in many organizations and markets.
  • Prioritizing cybersecurity – As data breaches continue to rise, Americans are increasingly conscious of cybersecurity threats. According to 16% of U.S. finance leaders, cybersecurity threats are holding their organizations back. (That figure drops to just 11% in the U.K., and 7% in Canada.) As digitally-native older millennials rise to financial leadership, they’ll face a greater understanding of online dangers. The Great Resignation, which saw the nation’s 'quit rate' reach a 20-year high, raises the priority of recruiting technically savvy pros – not only to respond to cybersecurity threats, but also integrate new and emerging technologies. Fewer than half (47%) of finance leaders claim their organization is prepared to hire new talent or retain existing workers. 
  • Adopting cryptocurrency – About half of U.S. finance leaders have either personally used cryptocurrency (47%), invested in it (51%), or made plans to invest in it (49%). Meanwhile, 21% of these leaders say their organizations currently accept cryptocurrency as payment. What’s more, 33% of U.S. finance leaders say their organization plans to accept cryptocurrency as payment within the next year. 
  • Exploring the metaverse – The metaverse – that emerging network of immersive virtual worlds – allows users to interact with businesses, brands, and each other in digital environments. Multi-billion-dollar investments from tech giants like Meta (formerly Facebook) and Microsoft have convinced many that the metaverse is the next frontier. That’s why organizations and their CFOs are preparing to capitalize on the new opportunities. More than half say they are preparing for the metaverse by exploring new finance or accounting processes (55%) and developing relevant professional development training (54%). 
  • Expanding ESG coverage – As the U.S. moves closer to net-zero emissions by 2050, climate concerns are intensifying for both businesses and consumers. Today, 55% of Americans say they’re willing to spend more for eco-friendly products and 40% would boycott companies that fail to go green. Finance leaders want a larger role in Environmental Social and Governance (ESG) initiatives, such as developing KPIs for ESG initiatives and regularly reporting on sustainability programs. This is especially true for finance leaders in the 25- to 34-year-old cohort. Fortunately, CFOs are making impactful changes with their current resources. 86% of those surveyed agree their ESG programs run efficiently and achieve the maximum output for the allocated budget.

Today’s business landscape requires forward-thinking CFOs to rethink how they’re guiding their organizations. From diversifying their expertise and recruiting the right talent, to ensuring they implement emerging technologies and purpose-driven programs, there are a range of ways that finance leaders can ensure their organizations stay ahead of the curve. To meet the challenges and opportunities their businesses are facing, modern CFOs must embrace new opportunities and be flexible in responding to challenges.

We’ll discuss topics like these and more at the CFO Summit at Sage Transform 2022. The conference for Sage partners and customers will take place Oct. 10-14, in Orlando, Florida. Learn more here about Sage Transform 2022.

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