In the traditional corporate landscape, the Chief Financial Officer (CFO) was often seen as the bean counter, responsible primarily for financial reporting and compliance. However, as businesses evolve and face increasing complexity, the role of the CFO has undergone a significant transformation. Today, CFOs are strategic partners who play a crucial role in driving growth, innovation, and long-term success. In this post, we'll explore how the role of the CFO has evolved and the key characteristics of a modern CFO as a strategic partner.
strategic leadership
Modern CFOs are strategic leaders who actively contribute to shaping the overall direction and vision of the company. They work closely with the CEO and other executives to develop and execute strategic plans, identify growth opportunities, and drive business performance. By providing financial insights and analysis, CFOs help guide decision-making and ensure that financial goals align with broader organisational objectives.
Financial stewardship
While financial stewardship remains a core responsibility of the CFO, it goes beyond simply managing the company's finances. Today's CFOs are tasked with optimising capital allocation, managing risk, and enhancing shareholder value. They take a proactive approach to financial management, leveraging data and analytics to identify inefficiencies, mitigate risks, and drive operational excellence. Stakeholder management is also a critical skill for CFOs, as they must effectively communicate with investors, board members, and other key stakeholders. CFOs must build trust and transparency with all stakeholders and take an increasingly key role in leading a company’s investor relations program.
Technology & innovation
The rise of digital transformation has elevated the importance of technology and innovation in the CFO role. Today’s CFOs embrace technology solutions to streamline processes, improve efficiency, and provide real-time insights into financial performance. They leverage advanced analytics, artificial intelligence, and automation to drive innovation and enhance decision-making across the organisation.
strategic partnerships
Modern CFOs are strategic partners who collaborate closely with other functional areas of the business. They work cross-functionally with marketing, sales, product, operations, and HR to align financial strategies with broader business objectives.
Strategic CFOs are able to anticipate market trends, identify growth opportunities, and align financial strategies with the company's overall objectives. CFOs are no longer confined to the finance department but are integral members of the executive team, driving growth, innovation, and value creation across the organisation.
As finance and accounting professionals climb the ladder their technical skills will often get them ahead – whether they are great with systems and reporting, financial modelling, technical accounting matters, tax, etc. But the final jump is a big one and the skillset required to perform as a CFO will test their leadership ability, commercial nous, and ability to get out of the finance box and take a business wide approach. In my experience, a brilliant financial controller or commercial finance leader, won’t necessarily succeed as a CFO. And a brilliant CFO doesn’t need to be able to recite accounting standards – they need the broad knowledge base and experience to spot issues before others can, and the people skills to embed themselves in the broader business and become a sounding board for the CEO and board.
I’ve seen many business owners that have not hired a CFO, confused why their financial controllers cannot take a proactive big picture approach, deliver the ‘so-what’ along with the numbers, and bring solutions to the problems they find. It quickly becomes clear that they want the skills of a CFO but have hired something else.
At cdFirst, we understand the evolving role of the CFO and the importance of strategic financial leadership in driving business growth. Having spent many years in the CFOs shoes, we are well placed to provide tailored solutions to help CFOs excel in their strategic role, from financial planning and analysis, capital management, investor relations, technology integration, and more.
And if your business wants the CFO skillset but isn’t ready for the permanent CFO headcount yet, we can also provide a tailored Fractional CFO solution.