Today’s uncertainty and change will see finance leaders assuming greater responsibility.
The Covid-19 pandemic is changing the role of the CFO, with a growing shift to more strategic responsibility. This is according to research by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
“The world is changing at a rapid pace and professional accountants must keep up to stay relevant. Today’s CFOs need to be strategic and forward-looking, and no longer limited by their organisation’s financial agenda,” says ACCA country head Pat Semenya.
The survey of 1,152 members, as well as global roundtable participants that included CFOs and CEOs, found 72 percent felt that the CFO role will either “increase or increase significantly” in importance over the next three to five years. This proportion rose to 82 percent among CEO respondents.
In addition, 68 percent of CEOs felt that people highly value the strategic insights of CFOs. Respondents were asked to assess six hypotheses about the CFO role. They most strongly agreed with the hypothesis that CFOs will play an increasingly important role in strategy execution.
The rapid impact of Covid-19 on global economies has underlined the importance of a resilient and sustainable operational model. Many companies and business models may not survive at all. For Pat, some of the CFO role change is driven by a new risk environment:
“The definition of risks will change significantly, especially for the near term, and maybe even for the medium term. Whether it is strengthening or redefining the credit checks for your customers and suppliers, or re-evaluation of your global supply chain, risks need to be viewed through a different prism.”
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, the research found.
Less historic, more forward looking
Today’s CFO is more involved in corporate strategy focusing on long-term growth and partnering with CEOs by supporting them in strategic decision-making. “Aside from financial management expertise, proven business acumen and the ability to negotiate best price and deliver income gains, adaptability is vital, alongside dealing with a complex operating framework. Also essential are solid stakeholder management skills and the ability to communicate with non-financial professionals,” comments Pat.
The CFO will become predominantly focused on stakeholder and investor management rather than safeguarding and reporting. “The focus of the role is shifting from principally historic-based cost control to growth optimisation,” says Pat. “The CFO will provide the greatest value to the organisation through forward insight.”
Pat believes that CFOs increasingly see the CEO role as the next progression in their career development. An analysis by global organisational consultancy Korn Ferry reveals that only 13 percent of sitting CEOs in the global Forbes 2000 in 2015 moved into that position from being CFO. According to Korn Ferry, greater right-brain leadership, in particular people and relationship skills, is needed to beat the odds for CFOs who have their eyes on the CEO role.
Finance and technology
Technologies based on big data, business intelligence, analytics and the Internet of things (IoT) are reaching into every area of business life. “Massive technological change and shifting consumer trends demand a new approach to how the accounting industry creates value for clients. Automated processes can provide the bulk of services with oversight, while accounting professionals will focus on offering expert advice and insight, strengthening customer relationships in the process,” adds Pat.
Accounting professionals will use the same tools to move from data entry, recordkeeping and simple analysis to strategic business consultancy to make insightful forecasts for clients and be regarded as a trusted advisor for clients, including services around mobile accounting and connection convergence.
These changes are forcing the accounting industry to estimate what value they can add to their customers’ accounting processes. “A positive prediction is that machines and robotic automation will enhance the value of services, not detract from it. Basic services can be delivered more efficiently, allowing accountants to have more time to discuss their clients’ current situation and future needs,” adds Pat.
Global mentoring available
ACCA is a thriving global community of 227,000 members and 544,000 future members based in 176 countries. “Through our world leading ACCA qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance, and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow,” says Pat.
ACCA members participate in continued professional development (CPD). They receive materials and opportunities to support their CPD. These include a range of exclusive e-learning packages, as well as face-to-face networking events at local offices. Through ACCA’s partnerships with educational institutions, members benefit from both accelerated access routes and discounted fees on many courses.
This past September, ACCA announced the roll-out of its global mentoring programme. This initiative relies on a network of members sharing their knowledge with others through the programme, with the goal of making impactful connections and providing accountants around the world with opportunities for professional growth.
“The programme is there to help people set goals and build a culture of inclusion. Mentoring is a powerful – and increasingly important – tool that enables both mentors and mentees to reap the rewards of sharing knowledge and learning from others,” says Pat.
ACCA’s streamlined mentoring website aims to support mentors and mentees’ progress throughout their mentoring relationship. The site also includes resources to help professionals map out a successful mentor and mentee relationship.
