FACING FORWARD - THE EVOLUTION OF THE MODERN FINANCE LEADER

Over the past decade, much has
been said about the changing
role of CFOs and other Finance
Leaders. Long gone are the days in
which Finance Leaders were tasked
solely with financial management
and reporting; instead, the
responsibilities of today’s financial
officers can stretch from investor
relations to strategic growth.


The drivers for this change are
plentiful as they are diverse. From
increasingly stringent regulations
and the impact of globalization
to the transformation of business
and industry, the evolution of the
Finance Leader role has been a
necessary response to the growing
demands of a rapidly changing
world.


Despite having undergone sweeping
changes already, however, there is
little evidence that this evolution is
slowing. Looking back at the past
three years alone, the vast majority
of finance professionals surveyed
for this study said that they have
experienced either “significant”
(53%) or “some degree” (44%) of
change to their role.


While the exact nature of this
change varies from person to
person, the overall response lends
credence to the idea that the
Finance Leader role is beginning
to encapsulate a much broader
range of duties. Almost two thirds
(59%) noted that their role now
necessitates greater management
of risk and compliance issues, while
around half (46%) said that they are
increasingly asked to explore ways
of cutting costs or saving resources.


Elsewhere, significant numbers
of Finance Leaders say that their
responsibilities now include
everything from taking a more
strategic role in their business (33%)
and working in a multidisciplinary
function across the C-Suite (32%) to
customer data analysis (28%) and
helping to influence the company
direction in terms of mergers and
investments (27%).


The Finance Leader remit is
clearly expanding, and in multiple
directions at once. The Finance
Leader of today is expected to be
as comfortable with compliance as
they are company strategy, and to
juggle growth, efficiency and risk all
while balancing the many needs of
their executive peers.


While their role continues to
diversify however, Finance Leaders
aren’t able to neglect the day-to-day
responsibilities that have previously defined their function.
Asked to make a like-for-like
comparison between their primary
obligations now and three years
ago, Finance Leaders provided little
evidence that they are under any
less pressure to perform their ‘core’
tasks despite growing expectations
about what else they can deliver.


In listing what they see as the main
responsibilities for an Finance
Leader both three years ago and
today, respondents identified only
slight changes between the two
periods. Day-to-day accounting and
treasury duties are seen to be just
as relevant today as they were three
years ago, with compliance rising
in importance to occupy third place
and controllership falling to eighth in
its stead.


Revealing much as it does about
the growing importance of issues
like data analysis and economic
forecasting, this table is perhaps
more useful as further confirmation
that the working life of an Finance
Leader is spread increasingly
sparingly across numerous tasks.


While functions such as day-to-day
accounting and treasury remain
the dominant activity for Finance
Leaders, they were selected by
fewer respondents as a key 2016
responsibility (41% and 38%
respectively) than as a 2013 one (35%
/ 31%). Instead, the balance is spread
much more evenly across multiple
functions with just a few percentage
points dividing the six most commonly
selected answers. Essentially, Finance
Leaders are being pulled in more
directions than ever before.


The role of the Finance Leader may
be evolving, but in doing so, it is
becoming more taxing as well: 91%
of respondents agreed that their
role has become more challenging
over the last three years. As we
will come to see, the causes - and
consequences - of these challenges
could play a significant role in the
future of the finance function. 

 Finance

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