The role of Chief Financial Officers (CFOs) is no longer restricted to their traditional activities like accounting and auditing, financial analysis or managing compliance issues, but have vastly expanded to include building relationship capital, to being the co-pilots of CEO, to be storytellers, among many other roles. 

That was according to a study, “The Future CFO: Changing Roles, Changing Goals”, conducted by the IFMR Graduate School of Business at Krea University and Dun & Bradstreet (D&B) to capture the shifting priorities, new focus areas and diverse skill sets of new-age CFOs.

Challenge of skilled manpower

Among the key takeaways, the study said, availability of skilled person-power remains one of the biggest worries for CFOs.  The study highlighted MBA as a key career accelerator. “In Nifty 250 companies, 47 per cent  of CFOs with an MBA are under 50 years, compared to 35 per cent CFOs with non-MBA qualification for FY22,” the report said. 

The  report noted that from traditional CFO-led activities—accounting and auditing, financial analysis and planning, investor relations, financial risk management, product pricing and regulatory compliance, CFOs now find themselves more involved in corporate strategy, organisational transformation, digitisation, enterprise risk management and ESG implementation, and they feel these would be focus areas for next five years as well.

The study also said that CFOs need to build relationship capital through greater people-oriented skills and also be good storytellers to present the larger corporate purpose to multiple stakeholders.

“Today’s CFOs play multiple roles—they are trusted partners to CEOs on not just in financial but also strategic matters, conscience-keepers of Boards in enhancing stakeholder trust, storytellers deriving hindsights, insights and foresights from financial data, and PE-minded investors strengthening core businesses with investments in next-gen start-ups,” Ramkumar Ramamoorthy, Pro Vice-Chancellor for Professional Learning at Krea University, said, in a press release. 

No women CFOs

The survey interviews of CFOs were conducted between January and March 2022. To capture the demographic changes, D&B analysed the Nifty 250 companies—Nifty 50, Nifty Next 50 and Nifty Midcap 150 index companies for FY16 and FY22 to see how the needle has moved over this period across different facets and mine insights. 

The report also noted that the avowed commitments made by boards to increase diversity at executive levels do not reflect in the actual appointments. 

“In FY22, there was no woman CFO in Nifty 50 companies, and the number was less than 5 per cent in Nifty 250 companies,” the report pointed out. 

“The relationship between a CEO and a CFO is critical for any business. Our study found that the ability to envision business growth is the most important trait for a CFO. To be a trusted partner to the CEO, CFOs need newer skills to address newer demands of the market,” Preeta Misra, Senior Director, Dun & Bradstreet India, was quoted in the release.