A new report by Ernst & Young, titled The DNA of the CFO, challenges the assumption that all chief financial officers (CFOs) are aspiring chief executive officers (CEOs) and instead finds that the majority see their role as a vocation of its own. Of 669 CFOs interviewed across Middle East, India, Europe and Africa by the Economist Intelligence Unit for Ernst & Young, 73% saw their role as a career destination of its own with just 10% aspiring to be the CEO.
The majority of respondents report their leading strategic contribution to be in providing insight and analysis to support the CEO and the senior management team. "The CFO is expected to be someone who provides guidance, advice and counsel on the bigger picture," says Michael Hasbani, Ernst & Young's MENA Leader for Performance Improvement. "It's not just the numbers, but what you do with them and how you can use that information appropriately."
Financial crisis elevates role
Over 60% of CFOs have seen their standing within the organization elevated in the past three years. In part this is due to CFOs aligning the finance function closer to the business but also because the financial crisis has resulted in an unprecedented demand for the unique perspective and discipline of senior finance professionals to guide the business.
Who is the average CFO?
The research also provides a snapshot of the average CFO: they are most likely to be male; are highly educated, highly skilled and highly motivated; 42 years and eight months old; have worked in finance for most of their careers; believe that five years and 10 months is an appropriate tenure for their role; and most likely to hold either a degree in finance (29%); MBA (27%) or a chartered accountancy qualification (27%).
Strategy co-pilot
There has been a shift in the perception of the finance function from outmoded "business prevention units" to an enabling partner to the business. Just over half of the CFOs surveyed said that business managers routinely consult them on key aspects of strategy. But the majority of respondents say their contribution focuses on providing insight and analysis to support the CEO and ensuring that business decisions across the business are grounded in sound financial criteria. The CFO acts in many cases as the co-pilot; driving the process of setting corporate strategy and bringing that vision to life.
Top three business priorities
While CFOs are reveling in their newly elevated role, they are also coming up against the challenge of carefully balancing the development of company strategy with the renewed focus on finance fundamentals brought about by the financial crisis. CFOs identified cost management, risk management and cash flow as their top three business priorities in the wake of the financial crisis.
Haytham Abi-Mershed, Partner, Advisory, Ernst & Young MENA says: "The CFO is ideally placed to play a central role in strategy formulation. As the leader of the finance function, they should have both breadth of perspective across the performance of the whole company and a depth of perspective into where value is created. They are often more informed about a business's operations and underlying performance than anyone else in the company."
Public face of the company
Almost two-thirds of respondents said they now act as the face of their company on all financial matters and performance, with a similar number agreeing that since the financial crisis, the CFO's key priority is to increase financial trust in their business. "CFOs are under greater pressure to be the public face of their company but recognize the need for investment in building stronger connections with a number of their key external stakeholders. They pointed to communications and influencing as the most important area for improvement," adds Hasbani.
Less than half of respondents say that their relationship with investors is good or excellent, while just 21% say the same for their relationships with governments and 25% for their relationships with the media.
