For the CFO to take an integral role in shaping the corporate agenda, they must help executives understand the business challenges. Every CFO must understand how the business drives the business model and its role in setting the corporate vision and strategy, accounting for P&L and cash and risk. They should help develop enterprise-wide financial reporting, accounting, cost control, and enterprise risk management, as well as advanced analytics and controls.
These skills are now being communicated in concert with business strategy. Business leaders now have better visibility into how the company generates and uses its financial resources. CFOs serve as trusted business advisers. As the leading business resource for the C-suite, they support finance, operations, compliance, and risk teams in critical decisions that impact long-term business and financial success.
As such, CFOs are being challenged to lead change within the financial management function and within their organization and beyond. CFOs will also be tasked with providing strategic guidance to stakeholders and public-facing teams through various formats, including presentations, speaking engagements, social media, and other forms of engagement. This will require developing fundamental insights and information-sharing skills and a willingness to embrace new technology and emerging tools to support these endeavors.
However, their enhanced role also brings tremendous complexity and great risk. Cultural and structural changes can easily turn a successful company into a wounded corporate corpse. The risks are real. Without a guiding vision and constant vigilance, CFOs can provide little or no oversight and often can be ignored, delegating the day-to-day responsibilities to the financial team.
For much of the past decade, the CFO has developed the “fiscal officer” role—someone who facilitates financial management and helps the business run smoothly and safely. In today’s economy, however, the challenges of operating in the new business era are compounded by competing for global and cultural pressures.
In addition to preserving investor confidence, CFOs must also manage risk and reduce operating costs. Many business leaders are thinking ahead and adopting this “third leg of the stool” as a vital part of their strategy. CFOs embrace this new role and play a much more active role in strategic planning.
Gary McGaghey’s main areas of focus are helping companies enhance and build their marketing, sales, and distribution capabilities and manage their working capital and capital allocation. Gary McGaghey has a proven track record of successfully driving commercial and operational improvement at leading multinationals. Stay connected with Gary McGaghey on Crunchbase