As markets turn and the costs of building a startup become more complex, CFOs are being tasked with more than ever before. It’s gotten so bad that 60 percent feel “used up” by the end of the day, according to a Sage Intacct survey.
“Reach out. Call a friend. I think there is a lot of solidarity and a lot of best practices to be learned among us.”
With global turbulence as a driver, the role of the CFO in a growing, tech-enabled business has now fundamentally changed. In a webinar hosted by Sage Intacct, Daniel Oh, VP of Medium Segment, Sage Canada, and Pamela Steer, President and CEO, CPA Canada, discussed the evolving role of the CFO and the challenges that come along with change.
The “F” in CFO now means three things
In traditional corporate terminology, the “F” in CFO means “Financial.” But Sage Intacct research found that the redefined role of CFO is one of three identities: the Chief Facilitative Officer, the Chief Fairness Officer, and the Chief Future Officer.
The facilitative CFO is responsible for “getting the job done”,” said Oh. The key focus for this mindset is improving projects outside their business function on top of leading the financial element of the business. In particular, Oh said the Chief Facilitative Officer usually takes the lead on digital transformation and overall business digitization since the programs inevitably flow through finance for approvals.
In contrast to the hyper-practicality of the facilitative officer, the Chief Fairness Officer is characterized by a firm belief that a business is defined first by its people, not its profits. This type of CFO naturally focuses more on diversity, equity, and inclusion (DEI) initiatives and works to fund them as a pathway to innovation. This is also the most alluring persona—the highest number of respondents in Sage Intacct’s survey (54 percent) said they want to adopt the fairness officer persona.
Finally comes the Chief Future Officer, with its laser focus on making sure the organization is prepared for the future—both how the business can both afford to pay for it and how it will use the financial investment for further growth. Oh said this persona focuses heavily on the changing world of work. In particular, he noted three different areas where a “Future” officer will look: remote and hybrid work, new and emerging technologies like artificial intelligence, and also how DEI initiatives can produce more innovation. Oh added that this persona reports feeling the most embedded within its organization, suggesting that organizational leaders gravitate toward people who can help them prepare for an uncertain future.
Discussing the personas, Steer said she sees value in all three—but the best CFOs need to inhabit all three at various points, depending on the needs of the organization.
“It’s very thought-provoking and helpful to CFOs to project themselves in each of them to say, ‘okay, where do I need to focus my energies at this particular time for our particular organization?’” said Steer.
The rise of ESG in finance
Another big change in the CFO landscape is that ESG—Environmental, Social, and Governance—priorities are increasingly coming to the CFO’s desk. According to Sage Intacct’s research, 77 percent of finance leaders say this area has grown in the past year for them.
Steer added that ESG is an area where Canada is a global leader, citing the International Sustainability Standards Board’s (ISSB) recent decision to choose Montréal as its second global hub location (the first is in Frankfurt, Germany). Steer said the decision will allow a baseline for capital markets to assess not just financial performance but also ESG performance, which could lead to “a whole new ecosystem” around ESG reporting and investment.
“CFOs absolutely sit right at the center of ESG issues,” said Steer. “It’s where all the data comes home to roost.”
Continued learning is critical
As demands on the role change and increase, the panel noted a key shift towards data analysis, regardless of which CFO identity an individual takes on. For example, Steer shared that one CFO told her they currently aren’t hiring CPAs as much, instead hiring data scientists in the finance department. Steer added that other CFOs told her they are focusing on upskilling and reskilling existing team members to give them more data orientation.
Yet it seems Canadian leaders feel more up to the challenge than others. In Canada, more than half of the finance leaders (58 percent) surveyed say they are ready to hire new or retain existing talent. This compares to 47 percent in the US and 45 percent in the UK, according to Sage Intacct research. But Steer also noted it’s not just about hiring data analysts, adding that you need team members with strong financial minds and “judgment” skills—the people who can poke holes in financial models and identify strategic insight from data.
Beyond upskilling their teams, Steer said it’s crucial for CFOs to self-educate, continually learning about new trends and developments in their industry. While Steer said learning on your own is critical, particularly as trends accelerate, she also was clear that you don’t have to do all of this alone—that reaching out to the broader CFO community is essential to success.
“Reach out. Call a friend. I think there is a lot of solidarity and a lot of best practices to be learned among us,” said Steer. “And I think that having shared experiences, shared best practices allow us all in a non-competitive way to make each other better and to make our organizations better at the same time.”
Photo courtesy of Unsplash.