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CFO & Audit Chair

The Evolving Finance Role: Insights from CFOs

In recent years, the role of the Chief Financial Officer has undergone remarkable growth. Serving as true co-pilots within organizations, these leaders go beyond traditional financial oversight. Today's CFOs are at the forefront of strategic decision-making. They navigate technological advancements and steer their organizations toward sustainable growth.

Our Dublin office recently held two gatherings with CFOs from diverse industries to discuss the multifaceted dimensions of the top Finance role. The discussions centered around key themes: strategies for raising tech investment, building and retaining a strong finance team, and the pathway for CFOs aspiring to become CEOs

Read on for the highlights:

Making the Case for AI Investment in the finance function

CFOs are strategically embracing digital transformation and AI to enhance their organizational functions. However, a major leadership challenge shared by participants is securing buy-in from their organization, particularly the board.

One approach CFOs take involves engaging the board by highlighting the tangible benefits of technology, with vendors playing a crucial role in providing this information. Subsequently, CFOs can hold a targeted AI conversation guided by insights from both consultants and vendors. However, as they noted, it is important to have the board focus on controlling risk rather than just enabling better performance. 

During the implementation phase, a significant leadership lesson drawn from the CFOs’ journey is the commitment at the executive level to invest in foundational principles of adoption, such as gathering and storing data, and recognizing that this transformation is a gradual process requiring time. While the process varies according to industry and ownership structure, a universal principle applies: “Have a clear plan of where you need to get to. There is a genuine cultural change element to embarking on a transformation like this," said one CFO. And as early adoption advances with basic applications, it is critical to demonstrate small wins as a convincing point. 

Another lesson is embracing courage. “It’s important to work through fear about deploying the tools. It takes real strength of leadership to commit to deploying the tools and taking that risk around eliminating highly desired roles in the function,” said one CFO.
The discussion touched on the increasing challenges of fraud and cyber threats, underscoring the role of AI in enhancing detection and protection mechanisms. Overall, the CFOs stressed the necessity of aligning organizational culture, leadership commitment, and a strategic plan for successful technology adoption and digital transformation.

CFOs also outlined both advantages and potential drawbacks of technology implementation within the finance function:

Advantages Risks to Manage
  • Allocate more resources for interacting with clients and adding value.
  • There's a risk that global IT transformation could become overwhelming for a business. CFOs need to ensure it doesn't dominate the agenda and distract from daily operations.
  • Unify and standardize data, compressing information.
  • Concerns arise about the reallocation of roles due to tool deployment.
  • Use AI during the transition of specific tools to analyze investor presentations for language and tone, providing guidance before publishing results.
  • The risk of emerging "shadow finance teams."
  • Technology allows finance to create insights instead of spending hours creating data for insights.
  • How can a CFO embrace AI when not everyone at the top table supports the idea?
  • Boost employee engagement by eliminating mundane tasks. In the future, ERP and company-specific applications will be quick and affordable.
  • AI will shift data ownership from finance to the CIO. This change raises questions about the CFO's role and responsibilities in handling vast amounts of organizational data.
  • Ensure reports are interactive rather than static.
  • AI is helping answer previously unanswered questions.
  • The FP&A team can either challenge or build upon AI-generated insights, given their understanding of the business context.

Building and Retaining a Strong Finance Team 

Egon Zehnder’s new global survey with 600 CFOs uncovered that two-fifths say it’s harder to attract top financial talent today compared to two years ago. Our discussions in Dublin echoed this sentiment. As finance and accounting become more automated, a successful finance team will require more operational know-how, increased IT and AI knowledge(in fact one Individual’s advice to their younger self would now be to have “completed a coding course”), as well as a greater focus on leadership and communication. 

Discussing talent development and succession, CFOs acknowledged that the lack of a straight career path in finance poses a challenge to talent retention in an already challenged landscape. Some organizations have recognized the importance of mobility within finance, providing high potentials with clear pathways to higher roles—a strategy that respondents in our global CFO survey highlighted as key in building and developing the right talent bench.

The Pathway from CFO to CEO

Considering the nature of the job and unique position as the organization’s co-pilot, becoming CEO is a natural next step for CFOs. And over 60% of CFOs in our global survey share the aspiration to become chief executive.

But other factors may come into play. The nature of the company itself is critical in determining whether a CFO is a likely CEO successor. For example, one participant who serves as CFO at a retail company shared that creativity is a core skill to their CEO—a quality not always associated with CFOs. Consequently, this individual does not see themselves as a likely CEO successor within their organization.

At the same time, external factors such as responses to financial markets may also impact CEO selection. Investors currently favor CFOs for CEO positions due to their perceived risk reduction. Yet, the success of the CFO-to-CEO transition hinges on the organization's deliberate succession planning. Investing in a versatile executive team broadens the pool of potential CEOs beyond just the CFO. Notably, our CFO survey identifies the top three skill gaps hindering their path to becoming a CEO: networking and visibility, customer and market knowledge, and operational expertise.

Overall, the consensus among participant CFOs was that intentional CEO succession planning, investment in executive development, and a commitment to cultivating well-rounded leaders have proven to be successful strategies for organizations aiming to transition CFOs to CEOs effectively.


We'd love to hear from you: Did these insights align with your experience as a CFO? Please get in touch and share your thoughts with us.

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