As the economy hovers perilously above recession, the role of the Chief Financial Officer (CFO) has once again been pulled into focus. Pressure is mounting on finance professionals to manage growth in line with controlling costs; to maintain a lean operation but also an agile one that can capitalize quickly on improved conditions. History has shown us that upturns can gain momentum very quickly and companies don't want to find themselves on the back foot.
I would argue that the global economic downturn has affected the job descriptions of CFOs more than any other C-level position. The "to-do" list of a CFO in 2011 is very different to that of a CFO in 2008. The scope of responsibilities has widened considerably: today's CFO is not only expected to be technically strong and an expert on matters financial and regulatory, but a strategic-thinker, a visionary, a leader. More a navigator of a ship rather than a chief mate, if you'll allow the metaphor.
In turbulent times, boards tend to put proven, practical and shrewd performers at the helm. This is certainly something I have witnessed over the past few years. I wasn't surprised to read in Accountancy Magazine that 54% of FTSE 100 companies have a chairman with a background in finance.
So, are CFO salaries rising in line with these added expectations? Well, it is hard to comment in the overall as there is such a range but there has been a noticeable trend towards incentivising CFOs within commerce and industry with bonus schemes. This is in contrast to the financial services sector, where intense public scrutiny resulted in the scaling back of bonuses this year and last.
CFOs are definitely becoming more prominent within companies and have 'louder voices' when it comes to top line strategy. We are seeing this trend - this shift in role requirements - trickle down to finance professionals at all levels. Companies are increasingly seeking commercial accountants with sharp business acumen who can add value and affect their bottom lines, rather than just operating as a back office or support functions. Accountants are now expected to interact with a wider circle of stakeholders, adopt more strategic mindsets and translate financial data coherently and accurately.
For these reasons (among others), finance professionals with good interpersonal or 'soft skills' in addition to technical expertise are now in high demand. The feedback I'm receiving from employers is that these value-adding skills will become even more important over the next 12 months.
But back to CFOs and a final word of caution. With all this increased strategic and operational importance, the weight on their shoulders will be heavier than ever. A number of CFOs have notoriously tried to achieve too much on their own and have become withdrawn from their teams, too reactive, overworked and consequently, ineffective. As the role of the CFO evolves, so will a greater reliance on the collective. CFOs will need to adopt more of an 'open door' approach than in the past. They'll need to delegate more and foster their teams. No man is an island!