European chief financial officers took longer to make
crucial decisions amid the recession because they have become more inclusive of
other executive opinions but they were also slowed down by mulling potential
consequences of their decisions.
According to a survey of 327 CFOs and treasurers conducted by the
Economist Intelligence Unit on behalf of ING Commercial Banking, to
find out about the type of issues confronting financial decision makers during
the downturn and how they were handled, CFOs admitted they took more time to
make decisions than in more prosperous economic times. “Intense discussion and
openness to contrary views characterised the debate. Due to the increased sense
of urgency, extreme measures were readily considered,”
The survey revealed that CFOs felt under additional pressure because major
decisions carried a knock-on effect that could put the existence of the business
at risk and because they often lacked experience of managing through a
The survey concludes that most decisions taken during the downturn focused on
the short term at the expense of long-term plans only a minority told EIU that
they took strategic decisions with a longer-term view on issues such as
investments in financial planning software and the transformation of business
“It’s a good thing that CFOs and treasurers are not inclined to take hasty
decisions under pressure,” said Annerie Vreugdenhil, head of corporate clients
at ING Commercial Banking. “But because it is difficult to look ahead in
uncertain times, there is the risk that necessary changes may be made too late.
The longer you wait, the bigger the chance that you will be forced to take
The benefit of experience is also demonstrated by the fact that half the
respondents indicated decisions “would have turned out better had they been
taken sooner” according to EIU. However, many said that they based their
decisions on the best information available at the time and that taking action
sooner would not have been possible.
Although it slowed down the decision-making process, improved internal
communications and collaboration was seen as having improved decision making. It
was deemed important to have strong personal ties within the management team and
of collaboration to tackle problems jointly.