Upswing in Demand for CFOs as Role of Risk Chief Evolves
Chief Financial Officers (CFOs) are wielding increasing influence and driving growth strategies. That’s according to a new study conducted by Ernst & Young and CFO Research Services. The research finds that senior management expects CFOs to focus on strategic issues, such as evaluating new products, provide leading indicators on business performance and driving M&A opportunities, rather than concentrate solely on monitoring and reporting financial information. “CFOs are elevating their game to meet the demands of today’s market conditions,” says T.J. Letarte, Head of Ernst & Young’s Americas’ Finance and Performance Management practice for financial services. “In addition to the important work they’ve always done, monitoring and reporting, they’re also helping to provide their firms with a comprehensive, actionable view of risk. By doing so, they’re creating more competitive institutions that can face future challenges more resiliently.”
Firms are demanding more from their CFOs and to boost their balance sheets, safeguard against future market shocks and help them carry the ever-growing auditing and accounting burden. Executive search firm, A.E. Feldman, says that the trend is opening doors for Finance Chiefs in a number of major corporations, consulting firms and law firms.
The need to invest in finance has never been more urgent, according to the E&Y study. The survey, which polled executives at 14 of the world’s largest banks, found that banks are fostering the evolution of the CFO by centralizing responsibility for a wide variety of finance roles. “Finance has always played a crucial role at the world’s leading banks, but the job is evolving,” says Sam Knox, Vice President and Director of Research at CFO Research Services. “CFOs need to spend less time keeping score and more time leading.”
As the lingering credit crunch compels firms to shore up their risk management processes, the E&Y survey also finds that other leading practices that CFOs and their firms could pursue include:
- Using shared services to scale and improve the rigor of finance
- Repairing fragile information infrastructures, establishing a firm-wide “golden” source of information and analysis to help ensure high performance in complex, multi-line businesses
- Aligning finance and risk by establishing a common framework for measuring business unit performance to provide the visibility needed to manage growth, cost and risk
