Ideas and Insights

Evolving CFO Role: Not Just for Finance Anymore

The role of the CFO has seen a paradigm shift in today’s fast-paced, ever-changing business environment. From being a financial record-keeper and controller, responsible for reporting, budgeting, treasury and managing internal controls, to retrospectively analyzing the financial impact of the organization’s decisions; the role of the CFO has evolved to being actively involved at the planning stage and in charting the future course of organization strategy.

Today’s CFO is expected to be part of the executive leadership team, utilize his critical thinking skills in setting the organization strategy and use his financial acumen in executing the same through sound financial and performance management. Simply put, the resources that have the strongest grasp on the organization’s finances need to be part of the thinking process from ground up. Not only should they assess the impact of strategic initiatives like mergers and acquisitions, but also participate in the tactical planning process, by analyzing the likely financial impact of industry trends and related strategic issues of the company. This requires the CFO to have deep understanding of operations, industry trends, competitive landscape and macro environment.

Besides being a credible spokesperson for the firm with key external stakeholders including lenders, banks, capital markets participants, shareholders and investors; the CFO is engaged constructively with senior leaders - including the Board, the CEO and business unit heads - challenging and forcing them to take decisions business decisions that are in the wider interest of the organization. The CFO dons multiple hats, acting not only as custodian in financial matters but becoming an active participant in strategy, planning, regulatory & compliance matters and risk management.

The recent economic downturn, more so escalated by the dip in oil prices in the Middle East, has added further complexities to the role of the CFO. The CFO in the region, is managing internal complexities such as legacy systems and environments, evolving business risks, expectation of the stakeholders, and supporting increasingly complex operating models. The challenge is further compounded by the fact that the region is dominated by family run businesses, wherein the CFO also needs to deal with specific issues related to governance, policies and structures, succession planning and business continuity.

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This article/ infographic has been compiled based on freely available information from secondary sources. While PKC Advisory has used sources believed to be reliable, the same have not been independently verified for fairness, accuracy, completeness or correctness. Accordingly, no representation or warranty, express or implied, is made and thus this article / infographic should not to be relied upon or used in substitution of independent due diligence and judgment.