It’s been at least a generation since CFOs began evolving beyond their historical persona as “bean counters” into the key strategists they are today. In fact, judging from the results of a broad new study, finance chiefs may even be more important to companies than CEOs.
The growth path of the CFO profession has accelerated over the past decade of “unprecedented global risk, economic volatility and a surge in digitalization,” said the study’s sponsor, OneStream, a provider of a unified finance and operations management platform.
Recent events, such as the COVID-19 pandemic, “have really seen [CFOs] step into the spotlight,” OneStream wrote in its report on the survey, which included 1,000 CFOs, 250 CEOs, 250 line-of-business leaders and 500 investors with assets of at least $10 billion. “Businesses are increasingly relying on finance leaders to steer them through uncertainty and ensure resilience.”
Most (67%) of the CEOs themselves said they believed an organization’s success or failure rests on the shoulders of the CFO.
Investors identified the competence of the CFO as a company’s second-most-important attribute, behind only its market expansion opportunity. The competence of the CEO was only seventh on investors’ wish list.
Four out of five investors said that for them to invest in a company, they must be confident that the CFO is an ambitious driver of corporate growth. When that criterion is met, investors indicated that on average they increase their initial investment in the company by 2.6%. Among the world’s largest asset managers, with more than $50 billion in assets, the premium was 3.6%.
That expectation among investors lines up with the expectations of CEOs and line-of-business managers, of whom 69% and 78%, respectively, said they expect the CFO to be an ambitious growth driver.
About nine in 10 investors (88%) as well as 65% of the surveyed executives agreed the CFO role will be even more important to business success over the next 10 years. “With persistent economic uncertainties and an evolving regulatory environment, CFOs already feel pressure to steer the business toward growth,” said OneStream CEO Tom Shea.
Four-fifths (80%) of investors said they’re usually aligned with CFOs on what the business should prioritize.
Unfortunately, 69% of CFOs reported they’re struggling to drive organizational strategy and growth due to an ever-expanding charter. Indeed, 70% of the surveyed executives said CFOs today are expected to be “masters of everything” who understand all of the company’s risks and opportunities.
Investors agreed. In fact, 79% of them said CFOs generally are too busy with operational duties to fully focus on the strategic elements of the finance function that attract investors.
The top attributes CEOs look for their finance chiefs to possess are capital allocation skills, financial acumen and integrity and transparency. Line-of-business leaders additionally prioritize the latter, as well as risk management expertise, data analysis, and leadership/team management
