HARPING on about the ‘ever-changing role’ of the CFO is something I try to avoid doing. It’s obvious that the role is different from that of 30 years ago – a time when, for example, many banks didn’t even have a board-level finance chief.
What interests me more is how the expectations of what a finance chief can achieve have evolved over time.
The role itself, in terms of accounting and financial stewardship and reporting, is pretty much still in place. What has happened is that it has expanded, rather than changed shape.
And as such, CFOs have had to work out how to delegate and automate. And data, once held in various business silos such as sales or marketing, is starting to fall under the remit of the CFO – in an attempt to align financial and non-financial information in a way that can be analysed and used to predict the future. Risk management, investor relations and IT have all come under the CFO remit in various shapes and sizes over time.
But, as the fascinating Russell Reynolds research shows, what we expect of the ‘CFO brain’, in terms of skills and technical ability, is probably similar to what you would have expected in 1985. Objective, logical and detail-focused … we wouldn’t want that to change, would we?
But what has changed is that this increase in responsibilities has made the CFO a go-to person when hiring for the CEO role.
During the retrenchment and protectionism following the credit crunch and recessions, these skills and mindset have catapulted many CFOs into the top role. But as we look to drive business forward, do we still want CFOs taking up CEO positions?
The CFO role has expanded to look forward, rather than just focus on collating and presenting backward-looking information, and this will give finance chiefs the opportunity to continue to take the next step up. CFOs’ ability to work in a data-driven world, and the fact that they are more likely to be more collaborative than ‘typical’ bosses, are seen as key by Russell Reynolds.
Perhaps, though, the CEO role has also just got bigger. The need to ‘lead’, cajole, inspire and take risk must surely still be a big part of the makeup required. This means, therefore, that stepping up to CEO is certainly not the right path for all CFOs, as has always been the case. And it will continue to be so.
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