The role of a chief financial officer has evolved significantly over the years, and the pandemic accelerated that change to include more leadership throughout an organization.
Analyzing data, mostly of the financial variety, has always been central to the role, but today that also includes digital marketing analytics, machine learning and artificial intelligence, and agile business planning initiatives.
There is also a greater emphasis on how a CFO leads an organization from a cultural perspective. Gone are the days when CFOs could close their doors at the end of a quarter and parse numbers without thinking about how to communicate the information pragmatically to the board, broader management team, and employees.
“As the conscience of your organization, you must be able to find lasting solutions,” Ron Rael said about CFOs in his book “The Traits of Today’s CFO: A Handbook for Excelling in an Evolving Role.”
How the Role of CFO Has Changed
The challenge for many CFOs is prioritizing what matters most in a role with increasing responsibilities. To understand these dynamics, it’s helpful to unpack what the world looked like from a CFO’s perspective just as the pandemic took hold nearly three years ago. Most notably:
Companies had been operating in a long-term bull market with little need to evolve the CFO role;
Volatility started taking hold of markets, and more management teams began leaning on CFOs for an understanding of “what is really going on here” both from a quantitative and qualitative perspective. More executives started to leverage CFOs’ penchant for metrics to help interpret other areas of business, including environmental, social, and governance (ESG) issues;
More CFOs began serving as de facto communicators of key analytics, including sustainability, gender-pay gaps, and diversity; and
CFOs began shedding their bunker mentality as CEOs looked to the role for overarching leadership in a topsy-turvy environment with a host of geo-political and social issues affecting the bottom line.
Today’s CFO operates more like a macroeconomist who also contends with micro issues. The evolution of such a role is demonstrated in the tenure of Disney’s veteran chief financial officer, Christine McCarthy.
Once a treasurer, McCarthy took on the role of CFO in 2015. She effectively went from a low-profile position to operating the financial controls of a very public entertainment giant. There is also speculation she may ascend to the role of CEO following Bob Iger’s return.
What Makes Today’s CFO
Whatever trajectory McCarthy’s career takes, she epitomizes many of the traits that define modern-day CFOs. These traits include:
A combination of quantitative skills and emotional intelligence to understand the needs of an organization and its people;
A curious mind with a desire to help all aspects of a business;
Unwavering support from the CEO to make decisions that influence the direction of an organization; and
Advocacy for the people who make up an organization and are ultimately responsible for its success.
The sum of these traits encompasses the profile of a next-gen CFO who will face a bevy of global and regional challenges with social and financial implications. The more we can prepare CFOs to build a broader set of skills, as well as embrace character traits that focus on the human side of doing business, the stronger the overall performance of our organizations.