The modern CFO: Guardian, Change-maker, Manager, Planner

To help new accountants get ready for a CFO role at large companies, the Institute of Chartered Accountants of Ontario (ICAO) and Queen’s University conducted extensive research on the roles of the CFO. This research dives into the skills needed to be a successful CFO, highlighting how the role has expanded to include a wide range of responsibilities. The study details the CFO’s four main jobs: Steward. Catalyst, Operator, and Strategist. It outlines the necessary skills for doing well in each area. In summary CFOs do a lot more than just manage finances. They take on four important roles:

 

1. Steward (Guardian), keeping an eye on the company’s assets;
2. Catalyst (Change-Maker), pushing the company to improve and grow;
3. Operator (Manager), handling everyday financial tasks; and
4. Strategist (Planner), plotting the company’s financial future.

These roles are vital for a company’s financial health and its direction.

 

The Chartered Institute for Business Accountants (CIBA) leveraged the research as a foundation to develop its Chartered CFO designation. Collaboratively, CIBA co-founded the International CFO Alliance aiming to standardize CFO competencies at a high level. This initiative led to applying for the registration of these competencies with the European Committee for Standardization (CEN). CEN plays a crucial role in setting standards that guarantee the quality, safety, interoperability, and environmental performance of products, services, and systems throughout EU member states, aligning with the goal of elevating and standardizing the CFO role across Europe.

 

Building on the foundation of these four pivotal roles, let’s delve deeper into each one. Understanding the nuances and key responsibilities associated with being a Guardian, Change-Maker, Manager, and Planner will shed light on the multifaceted nature of the modern CFO. The study highlights the essential skills required for each role but also illustrate how a CFO’s diverse contributions drive a company’s success and strategic direction.

Highlights from the study

While all four roles are deemed important, the Steward role is considered the most important by survey respondents.
Overall, respondents found experience to be the best way to develop competencies. However, education and mentorship are also important for developing specific skills. Most competencies should be developed early in one’s career and continue to evolve through the middle stages. Late development is less common but still acceptable for some competencies.

 

Looking ahead, respondents place a strong emphasis on the importance of forward-thinking across all CFO roles, particularly highlighting the Strategist role as most crucial. This prioritization underscores the value placed on a CFO’s ability to anticipate and prepare for future challenges, steering the company towards long-term success and sustainability.

 

Based on these findings, the study suggests that accountants aiming to become CFOs should focus on developing a broad range of competencies, with particular attention to soft skills and strategic thinking. It also emphasizes the importance of gaining diverse experiences and continuously improving skills throughout one’s career.

 

Steward (Guardian): Safeguarding Assets and Compliance

This role is vital for maintaining trust with stakeholders and ensuring the financial health of the organization. This involves managing risks, ensuring compliance with financial reporting requirements, and mitigating operational and fraud risks. The CFO collaborates with business unit owners to identify and manage risks effectively while maintaining compliance with regulatory requirements. Knowledge of controls, governance models, and operational risks is essential in this role.

 

Operator (Change-maker): Balancing Efficiency and Effectiveness

As an Operator, the CFO focuses on balancing capabilities, talent, costs, and service levels within the finance organization. This includes ensuring operational efficiencies, developing finance talent, and adapting finance’s operating model to meet changing business needs. The CFO must also allocate finance resources effectively to drive the greatest return on investment while managing risks associated with global operations and evolving financial reporting standards.

 

Catalyst (Manager): Driving Strategic Execution

As a Catalyst, the CFO is tasked with instigating change and fostering a culture that embraces strategic objectives. They work to align the organization’s behavior with its strategic and financial goals. This involves collaborating with senior management to evaluate and execute strategies, implementing performance measurement frameworks, and ensuring accountability for results. Strong communication, change management, and leadership skills are crucial in this role.

 

Strategist (Planner): Shaping the Future Direction

The CFO serves as a Strategist by helping set the company’s future direction. They leverage their financial acumen to enhance business performance and shareholder value. This includes framing capital acquisition, engaging in M&A activities, and integrating performance management strategies. Critical thinking, a global financial perspective, and the ability to deal with ambiguity are key competencies for this role.

 

By delineating these roles, these frameworks help organizations understand the full scope of the CFO’s responsibilities and the diverse skill set required to excel in this position. The CFO’s role is multi-dimensional, requiring a diverse set of skills and competencies. By embodying the four roles of the CFO and benchmarking it to the highest standards, finance leaders can effectively navigate the complexities of the modern business landscape, driving strategic growth and financial success.

CFO Club Africa and the International CFO Alliance

CFO Club Africa, a brand of CIBA together with International CFO Alliance (ICFOA) are dedicated to fostering collaboration, establishing common standards, advocating for the CFO profession globally, and developing a collaborative network of CFO Associations.
At the core of ICFOA’s mission is the development of a global CFO Certification, which aims to establish a standardized competency for CFOs globally, focusing specifically on the needs of the international finance community and enhancing their professional competencies and recognition worldwide.

This certification is part of a larger effort to elevate the CFO profession globally, providing CFOs with enhanced professional recognition and networking opportunities. Other CFO certifications, such as the CPA, CMA, and CGMA, are widely recognized and highly regarded, but they may not necessarily address the specific challenges faced by CFOs in an interconnected global economy.

The Global CFO Certification seeks to fill this gap by creating a tailored educational framework that addresses the evolving demands of the international finance marketplace.

 

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