Fresh research from EY says that 84% of CFO respondents acknowledged the role as profoundly demanding, up from 76% in 2022. If ever CFOs needed their superpowers to be singing at full song, it is now. CFOs are more frazzled than ever (who knew?)
In 2024, CFOs, Controllers, and their tax and finance teams play increasingly strategic roles in real-time modeling and business structuring. The silos have fallen. The chief financial officer role has evolved from cost gatekeeper to strategic partner, driving digital transformation, innovation, and growth. These are high-level functions. And the increasing time spent at the strategic table often collides with the daily operational demands of the role.
But some CFOs are embracing the frazzle. And not in some chest-thumping Ra! Ra! team-building way. This financial leader sounds genuine when he says, “There’s never been a more thrilling era to be a CFO.”
So, do CFOs love or hate their roles? In the need to be ever more agile to adapt to continuous change? Are they hanging on for dear life? Or Captains of the Starship Enterprise? And how does reinventing their role look in real-time?
Superpower 1: Creating trust in the value chain
We live in the age of a trust-driven economy, where trust shapes customer loyalty, buying preferences, and talent retention. But trust is not a given, and CFOs are expected to play an active role here, too. How are CFOs bridging this gap between their traditional and new function? How are they fostering stakeholder trust and providing the momentum for crucial business and societal missions?
They are establishing trust and a sense of purpose. Trust has emerged as the modern currency in the CFO’s domain, impacting customer loyalty, purchasing choices, and employee retention. However, trust can’t be taken for granted. In today’s landscape, CFOs are expected to cultivate trust among their stakeholders, ultimately delivering outcomes characterized by transparency and sustainability. Additionally, they are tasked with taking the lead on business and societal matters.
They’re doing this by aligning senior leadership around their customers’ and employees’ top priorities. They can help focus the organization on the most critical trust initiatives to invest in.
Superpower 2: Unlocking the power of emotional intelligence
High-flying CFOs possess a versatile skill set that goes beyond traditional finance training. They are evolving into agile, well-rounded GMs, deepening their understanding of the overall business and its operational intricacies.
In private companies, many CFOs are also technology visionaries, guiding teams through transformative initiatives to create long-term organizational value. Within private enterprises, many CFOs also take on the role of technology visionaries, spearheading teams through transformative undertakings geared toward fostering enduring organizational value.
Accomplished CFOs are following research emphasizing the significance of Emotional Intelligence (EQ) as the cornerstone of vital soft skills needed to cultivate and sustain relationships with fellow executives, employees, and external stakeholders.
Superpower 3: Wearing strategic and operational hats
A key challenge for CFOs is maintaining the momentum of change and innovation that allows their companies to navigate recent economic challenges and seize future opportunities.
In 2024, CFOs are predicting trends, evaluating risks, and squeezing more value from financial operations. When financial teams operate at peak flow, they don’t just help to keep the lights on in an organization. They can make them blaze. CFOs are central to this.
They’re enabling autonomy, creating a safe space for teams to push back, and nurturing future financial leaders by championing their personal growth. Moreover, they understand that our brains weren’t built for industrial qualities of uncertainty.
To address this, they offer reassurance and stability through open communication about their dedication to the company and the team’s future. And they’re demonstrating this commitment by shielding their teams from low-priority demands.
Superpower 4: Balancing the need for social responsibility
It’s that time in the article to introduce an acronym time (sorry.) ESG is short for Environmental, Social, and Governance. And in 2023, 94% of CFOs feel pressured to prioritize it.
That’s because integrating ESG factors into decision-making processes can help CFOs align their corporate priorities with the concerns of their customers and the values of their communities.
It sounds simple enough in theory, but on the ground, CFOs can get stuck in the weeds, navigating the complexities of ESG reporting, risk management, and sustainable financial performance. The pain point is the ESG scoring itself.
CFOs getting this right are figuring out how to establish a data baseline or decide which data to collect by collaborating with risk leaders to address strategy and oversight around issues like climate, workplace matters, and reputation. And they’re finding ways to communicate their organization’s ESG performance effectively.
Superpower 4: Technological wizardry
Although CFOs may not be directly involved in developing analytical tools, some are pushing the boundaries of what these emerging technologies can do by leveraging data and analytics for strategic decision-making and embracing digital expertise.
Many are real-time case studies of how finance departments can take the lead in utilizing analytics to pinpoint areas where these insights can be applied to generate concrete value.
They leverage this data to assess potential acquisitions for business expansion or market entry and consider divestitures to exit businesses that no longer align with the company’s strategy.
But behind any successful CFO is a capable and forward-thinking finance team. CFOs are improving at marshaling boots on the ground by creating cultures for their teams to thrive. Trust and transparency are at the heart of this for compliance reasons and to improve decision-making. In addition, attracting the right combination of talent is helping CFOs hit growth KPIs by performing more accurate analysis and scenario planning and more flexible budgeting and forecasting.
Super 5: Architects of tomorrow’s finance department
CFOs and controllers who drive bolder changes in finance teams can deliver better performance today and position themselves to outperform. This includes initiatives to optimize performance, streamline processes, and improve decision-making.
When asked about their company’s most important strategies to achieve a lower-cost operating model, CFOs and controllers in 2024 are focusing on the following initiatives:
- Implementing/increasing the use of shared service centers (53%)
- Migrating activity out of the tax department to other teams within the business (48%)
- Third-party outsourcing (40%)
Forward-thinking CFOs are enjoying the benefits of reimagining their tax function in response to tax reform implemented five years ago. This transformation involves a major overhaul of tax operating models in leading companies.
If you’re in the process of outsourcing your tax function, do get in touch with our sales team and book a demo.
Wrapping up
Financial gatekeepers. Trust-centric leaders. High-minded environmental, social, and governance innovators. The superpowers CFOs need are growing yearly, and trust is the backbone of all this.
Bold CFOs excel in aligning the interests of senior leadership, end customers, employees, and their finance function. They link fiscal responsibility with transparency while championing pressing business and societal issues.
Really good CFOs actively seek input from diverse stakeholders. Really great ones are discovering how to collect, analyze, and synthesize these diverse and often opposed priorities to drive their organizations forward.
