In today's dynamic business landscape, chief financial officers (CFOs) play a vital role in managing risks and preparing for unforeseen challenges. They are the creators of resilience and growth, shouldering new responsibilities across various fronts such as environmental, social, and governance matters (ESG), mergers and acquisitions (M&A), and corporate strategy. According to a recent survey by Egon Zehnder, nearly 600 CFOs worldwide have seen a significant expansion in their roles over the past five years, with 82 percent acknowledging this growth.
The survey delves deeper into how CFOs are shaping the future, sourcing talent, and navigating career aspirations. Understanding these trends is vital for organizations aiming to capitalize on the evolving role of CFOs and drive sustainable success.
According to the Egon Zehnder survey, the CFO role has expanded significantly, with 82 percent indicating that they've assumed additional responsibilities in the past two years. These added duties include overseeing environmental, social, and governance initiatives, managing mergers and acquisitions, and handling corporate development tasks.
Among CFOs, approximately half have taken on ESG or M&A and corporate development roles within the same time frame. Notably, there are differences across industries:
In the industrial sector, a majority (62 percent) of CFOs have incorporated ESG responsibilities.
The healthcare and pharmaceuticals sector has seen an uptick in cybersecurity responsibilities among CFOs compared to other industries.
CFOs have also embraced risk management and shared enterprise leadership with CEOs, making their role increasingly multifaceted. Looking ahead, CFOs anticipate a continued rise in responsibilities. Driving change, shaping strategy, and talent development are deemed critical competencies for the future.
To manage their workload effectively, CFOs rely heavily on their head of financial planning & analysis and controller or chief accounting officer. This collaborative approach is crucial as the career path to the CFO role increasingly includes prior experience in divisional or regional CFO positions, highlighting the importance of a diverse skill set within the finance team.
Industry and regional variances emerge in the role of CFOs. Notably, CFOs in the financial services sector exhibit less reliance on their controller/CAO compared to counterparts in other industries. Conversely, at the regional level, North American CFOs heavily depend on their controller/CAO.
When reflecting on the allocation of their time, CFOs highlight a disparity between actual and desired focus areas within their role. They express a desire to devote more time to strategic initiatives, talent development, collaboration with business leaders, and capital allocation. Furthermore, CFOs anticipate significant impacts from AI and machine learning on the future performance of their function, emphasizing the importance of adaptability and experimentation in these evolving areas.
Recruiting top finance talent poses challenges for CFOs, with two-fifths reporting greater difficulty in attracting such talent compared to two years ago. Layoffs, competitive labor markets, increased role demands, and skills gaps emerge as primary obstacles in this pursuit, according to the surveyed CFOs.
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