The role of the CFO is changing…
A chief financial officer is far more than a bean-counter, or a sparring partner for the CEO. David Chancellor of Tyzack Partners paints a portrait of the modern CFO.
Volatility and uncertainty in the current global marketplace have added to the changing role of CFOs. Their roles now extend well beyond the boundaries of traditional financial management. For a company to have a balanced management team, the CEO needs a CFO who has the expertise to support them in making high-impact decisions aimed at improving corporate value.
Beyond excellent accounting
The importance of unquestionable integrity (in light of the scandals at organisations such as Enron, Worldcom and Olympus), and formal training and experience in hardcore accounting, financial reporting and risk-management has not diminished, but the changing role means CEOs need to address CFO hiring in a way that focuses more on bringing in someone with strategic and commercial business strengths rather than someone who is an excellent accountant.
Fortune telling as standard
As pressure from analysts increases, CEOs need a CFO who can be relied on as business experts and forecasters. This means effectively shifting them from the day-to-day management of the organisation to include the boardroom. As a consequence the importance of finding a CFO who is a qualified accountant is diminishing. The emphasis is now on finding CFOs with a much wider field of expertise. Industry knowledge is a must. And a secondary degree such as an MBA or a career in investment banking could provide CEOs with the added competencies they require in their CFOs.
IT is a key business driver
As the CFOs role expands across all sectors of an organisation, it is the IT sector that generally has the highest capital expenditure and requires an in-depth understanding of the bigger picture technology presents. As such it is imperative the CFO has a good grasp of IT and works closely with the CTO. The CEO needs to ensure the CFO can effectively become the voice of the CTO at the boardroom table, where the CTO is not a board position.