A recent report by global consulting firm KPMG was titled, Introducing the Renaissance CFO.
Mere bean counters no more, today’s chief financial officers are thrust into the corporate inner circle, enmeshed in decisions on strategic planning, M&As and tax planning, among other top-level prerogatives. “CEOs and boards are looking for CFOs who can fill a value creation agenda alongside the traditional value protection skills,” says John Mulhall, a New York‒based partner in KPMG’s financial management practice.
A contemporary multinational CFO needs expertise in areas only marginally connected with bookkeeping, including data security, compliance with the US’s Foreign Corrupt Practices Act, and multi-decade plans for resource sustainability, adds Jeremy Hanson, who heads the global financial officers practice for executive search firm Heidrick & Struggles. “The ideal CFO is becoming more like a COO or CEO,” he says: “someone who can drive performance as well as contain risk.”
It sounds terribly exciting, except for one problem: Many old-school value protectors are not up to the new job. KPMG’s research finds that 30% of 549 chief executives polled globally felt their CFOs “don’t understand and assist with the challenges that they face within the organization.” Ouch.
Even as new demands increase their position’s stress, rising stock values sweeten incumbent CFOs incentive to cash out and spend their time more amenably. Some 130 of the Fortune 1000 had to find a new occupant for the chair in 2015, a rate that has been steady for the past few years, Hanson reports. To find the supermen or -women who might do as replacements, employers need to cast a wider net, including finance professionals from other industries or countries—or, on occasion, from Wall Street. “You used to be able to find a new CFO in the same town; now it’s a global search,” he says.
However tough the requirements, demands on and opportunities for CFOs are not going backwards, Mulhall predicts. Long-term relief may come as the traditional accounting function becomes increasingly automated, allowing financial controllers to spend more time on operational offense. “Look for a new CFO who has been helping run a business unit day-to-day,” he advises clients, “not one who’s been sitting at corporate headquarters.”