A report by ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) finds the COVID-19 pandemic is accelerating the shifting of the CFO role. The CFO of the Future report, with data from global surveys and virtual roundtable discussions, shows that the CFO role is continuing to evolve with additional responsibilities and that the global pandemic has brought these changes on faster than expected.
To evaluate the extent of this evolution, IMA and ACCA developed six hypotheses for participants to consider for their organisations’ CFO roles:
· The CFO will become predominantly focused on stakeholder and investor management rather than safeguarding and reporting
· The CFO will have a leading responsibility for business strategy formulation, validation, and execution
· The focus of the role is shifting from principally historic-based cost control to growth optimisation
· The role will encompass measurement of all aspects of the strategic objectives of the organisations
· The CFO will provide the greatest value to the organisation through forward insight rather than retrospective reporting
· CFOs will increasingly have the CEO role as the next progression in their career development
‘The events of the past few months have changed several finance and accounting fundamentals and will continue to do so, especially as it relates to the CFO role, said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. ‘Our research concluded that CFOs are no longer viewed solely as finance leaders. They are being looked to for governance and risk management, business change, business resilience, and technology advancement.’
The survey respondents, 1,152 ACCA and IMA members, as well as global roundtable participants that included CFOs and CEOs, saw most of the hypotheses already enacted. Respondents most strongly agreed with the hypothesis that CFOs will play an increasingly important role in strategy execution. The least supported hypothesis was the career progression of the CFO towards a CEO role; however, most felt that this trend would increase.
Additionally, 72 percent of respondents felt that the role of the CFO will either “increase or increase significantly” in importance over the next three to five years. With this increased responsibility, finance and accounting executives must focus on building a talent pipeline in their organisations that can satisfy the needs of the future.
‘Our CFOs of today are strategic and forward-looking, and no longer limited by their organisation’s financial agenda,” said Clive Webb, ACCA head of business management.
“They have broad agendas and are contributing to their organisations in ways that we identified back in 2012, even during this global pandemic. Our CFOs are more well-rounded than ever and will continue to enhance their skillsets as many take on more responsibility and possibly become CEOs in the future.’
Other key findings in the report include:
· 82 percent of CEO respondents felt that the role of CFO would increase or significantly increase in importance
· 78 percent of respondents assessed that the ethical lens was a differentiating factor for the CFO in comparison to other executives
· 68 percent of CEO respondents felt that people highly value the strategic insights of CFOs