The new role of the CFO – why more than just pure financial acumen are now essential for driving company-wide success.

The environment of companies is constantly changing – now even more than in the past. Organizations need to adapt to that change. For providing optimal performance in this process the CEO and CFO are working together more closely. Whereas the CFO of the past was mostly just concerned with ensuring the financial framework, today his role is much more dynamic. Besides the existing financial topics there are a lot of subject areas arising, which will develop an increasingly important role in the future. Of course, every company is individual and so got its own individual challenges, independent from this there are some topics that commonly arise: 

1. ESGs - Companies are increasingly being held accountable by the public on issues such as sustainability, social responsibility, and governance. Stakeholders no longer expect positive performance exclusively in the economic sphere, but also in various ESG influencing variables. Stock indices such as the MSCI World Socially Responsible Index (SRI) show that investors are also taking a close look at these issues. 
2. Digitalization continues to have a major impact on the corporate world. While topics such as switching to computerized systems are still relevant, the market continues to be transformed by the release of artificial intelligence such as ChatGPT. In finance, there are many new tools that involve a complex implementation process but play a critical role in the future viability of businesses the use of predictive analytics is an example for that. In a high amount of companies, it is also part of the CFOs job to keep the systems up to date. Also most the time automatization measures have their starting point in the finance department of a company. If they work well there, then they get implemented into other departments of the company.  
3. The CFOs overall importance for the company’s success increased rapidly in the last years. He is growing into the role of the CEOs right hand and supports and supports that strategic goals are pursued in operational decisions. The provision of the financial framework conditions for the options the CEO can undertake is one of his most important topics. Also, he is needed for the resource planning in an organization. For that he pursues the processes and makes sure, that the performance stays right on track with the set goals. 
4. Through digitalization and globalization the environment of companies is now more rapidly changing than ever before. Trends are transported more faster and therefore customer needs change within very small time intervals. To maintain success a fast adjustment to these changes is crucial. But most of the time especially big companies struggle to adjust this right on time. But large companies in particular usually find it difficult to change this in time. Due to the high processing times and the increasing complexity due to their size, they usually always fall short of their actual possibilities. Thus, new structures, such as the agile way of working, have to be implemented in the possible areas.  

The sum of these issues means that the CFO needs a completely new competence profile to carry out his or her activities. Financial topics still fall to him, but these are supplemented by very diverse topics. This requires the CFO to develop further in his role. 

Author: Thomas Graf