Johannesburg - The era of chief financial officers (CFOs) whose roles centre around operational and risk management are coming to an end, according to Ajit Kambil, the global research director of Deloitte’s CFO programme.
Instead, said Kambil, CFOs were increasingly expected and required to fulfil leadership and strategic roles in their respective organisations.
Speaking to Business Report, Kambil said CFOs were also expected to oversee other areas of operations, making their roles complex as they were expected to be stewards, operators, strategists, and catalysts.
As strategists, the CFOs had to provide financial leadership in determining strategic business direction, mergers and acquisitions, financing, capital market and longer-term strategies. “They are expected to be strategists who partner with their chief executives on financial matters and driving enterprise-wide change. Successful chief executives and CFOs drive change in their organisations,” he said. He said CFOs were to help in all aspects of transformation, including culture change.
Deloitte has CFO Transition Labs, which are personalised and exclusive one-day workshops for newly appointed CFOs. The labs are meant to help CFOs to transition and thrive in their new roles. “CFOs are among the few people with all the vision of the entire business,” Kambil said.
As part of the labs, the CFOs are expected to define and communicate their priorities, assess and develop a talent strategy, understand and influence key stakeholders and develop an action plan for their first 180 days. “Suddenly, most CFOs realise that soft skills are important. They must be able to narrate a story,” he said.
In the 180 days, the CFO is expected to assess the team and talent. Failure to allocate responsibilities could result in the CFO being bogged down by operational matters. CFOs need solid finance teams to free them from operator and steward roles.
In a speech at a recent finance indaba in Johannesburg, Kambil said: “The culture of an organisation, our mindset and how we do things can constrain the growth of a company. Very few CFOs get the opportunity to be transformative. You may need to repurpose the business to get the most out of it. From a product performance point of view for instance, there may be a need for a restructuring of the product to do well.”
A Deloitte 2015 CFO report said CFOs continued to spend more time in operator and steward roles than they did as catalysts or strategists. CFOs felt stretched when it came to their workloads.
Ambiguity
Pressures as a result of poor company performance and strategic ambiguity also keep them up at night, as do insufficiently skilled support staff, changing regulatory requirements and excessive administrative work.
“Increasingly, chief executives expect their CFOs to partner with them in shaping the company’s strategy, while boards have various regulatory, risk management and compliance expectations of them. Unfortunately, the 2015 survey continues to show that CFOs in southern, west and east Africa spend more time in operator and steward roles than acting as catalysts or strategists,” the report said.
The 46th CFO World Congress is to be hosted in South Africa from November 9 to 11, where top CFOs will be gathering to discuss the challenges facing them. Go to: www.iafeiworldcongress.com
BUSINESS REPORT