A CFO’s role: Changing Skills and Transformation in the current decade

Ms Anita Ananthan writes about the importance of CFOs enhancing their skill set through their career trajectory.

CFOs in the current decade have been performing the role of an all-encompassing strategic leader, going much beyond the boardrooms and financial presentations to the management and stakeholders. While technology was seen as an enabler, CFOs were seen as skillful leaders who would use innovation to reshape the entire mindset of the working community within various departments and pool in the combined efforts of all these departments through effective communication. Data is available in plenty across all departments. The direction to effectively drive this data into productive use through tech-savvy tools for predictive analysis and forecasting helps stakeholders visualize the future and the immediate steps to be taken towards its targets and goals. CFOs today are not only known as record keepers but also extend their role to risk and security compliance, business continuity strategies, and framing policies, building relationships and trust across internal and external stakeholders, and being a bridge of communication. They are seen across the globe as trusted partners in the business segment.

Digital and Technology Transformation: CFOs understand and visualize the need for the adoption of technology in different aspects of business and society. The need for the automation of processes has been compelling, especially during the COVID era. Technology transformation has to be adapted across different departments and correlated to ensure the ultimate results, which may be challenging in itself. The resource skill set, inertia to adapt to technology, the model and timespan to changes, the flexibility of the model, and bringing together all the departments, both lateral and vertical divisions, need a lot of initiative driven by a strong leader and a motivational driving force behind it. This can be coordinated better if the CFOs themselves understand and take the initiative to upscale themselves to understand the basics. There’s no compulsion to be a domain expert. This not only encourages others but also sets a leadership example within the organization and has an impact on external stakeholders, given the extent of efforts contributed by each associated and related personnel. The CFO essentially builds a binding bridge between the management and the workforce to keep them highly passionate and motivated to keep innovating to the growing and fast-changing trends in the industry.

Risk and Security Compliances: Risk Analysis, Historical Analysis, and Predictive analytics with Future foresight are crafted domains and expertise of the CFOs wherein the accumulated data is skimmed to provide meaningful information and communication is tabled across the related parties both internal and external stakeholders, apart from filing regulatory and statutory reports and forms to the authorities. Given the current scenario in a highly regulated industry, secured utilization of data and compliance reporting is highly important. It grades and ranks the organization’s performance based on ESG compliances, which are essential indicators for an external investor.

Capital Management, Budgeting, and ROE: The most important factors for any organization, as monitored by internal and external stakeholders, are growth and returns. CFOs have diligently exhibited their acumen with figures and their strategic decisions related to cost management efficiently during the COVID and post-pandemic years, with the scare of recession looming large. While utilizing and applying the working capital, line of credit, collections, and effective management of debtors and creditors, handling the resources including the retention dynamics, was very essential given the employee churning in the technology industry, where the attrition rate remains the highest in the last comparative years, CFOs have managed to effectively conquer this department and handle it with all their experience and acumen with figures, ensuring the right decisions by all the related parties.

Compliances and Organization Obligation and Duties towards Economic and Social Governance: Today, in the realm of ESG, the CFO’s role becomes more critical as he is accountable not only to the internal board and stakeholders but also to a larger audience like the regulatory and statutory and the customers, community at large. The CFO is the goalkeeper of any organization, and she/he cannot allow any miss. It reminds me of my mentor’s words: All the 11 players in a team cannot hit a goal, and all cannot be at all places on a field. However, the Goalkeeper’s Place is always at the nets, and he/she is the hero of any match played, though fans (me included) worship the Messis and Ronaldos of the world.