As the market shifts here and there, the role of the chief financial officer continue to evolve, juggling priorities and strategies to keep up with the changes.
To triumph over the expected and even the unexpected shifts, CFOs must be on the look out for the risks they are likely to face in the next 12 months.
These risks can turn into opportunities for growth and profitability if managed right.
The evolution in the role
As the CFO role expands, so does the influence of the finance function. With the vast volumes of data available, CFOs are increasingly assuming the role of data stewards. By leveraging advanced analytics and cloud technology, CFOs can drive strategic insights, improve forecasting accuracy, and optimise cash management.
The challenge now is in using such tools as the demand for talent with necessary strategy and tech skills is high. CFOs must reimagine roles, reskill staff, and invest in both technical and non-technical capabilities to drive successful finance transformations.
Return of investments
CFOs must have the nose for strategic investments to drive enterprise transformation, although there is an undeniable struggle to capture value from technology investments.
The challenge is in integrating new technologies such as generative artificial intelligence in the organisation's business models and assessing the total cost of risk at multiple levels.
Finance leaders must collaborate with chief information officers and chief transformation officers to align budget priorities, integrate strategic planning decisions, and respond swiftly to market changes.
ESG
The growing focus on environmental, social, and governance reporting has been on the CFO agenda, although this has been eclipsed in recent years by the advent of GenAI, soaring interest rates, and growing geopolitical tensions.
While compliance with ESG reporting requirements is crucial, CFOs can go beyond the basics and analyse how climate change scenarios may impact financial performance.
CFOs can leverage their forecasting capabilities and unique view of the business to develop sustainable strategies, explore tax incentives and green financing options, and align their organisations with decarbonisation goals.
Trust as a discipline
As primary points of contact for investors, analysts, and stakeholders, CFOs play a critical role in effectively communicating financial performance and the company’s strategic direction. With the proliferation of risks, such as geopolitical tensions and cyber breaches, CFOs and the executive team must practice agility and transparency.
By prioritising risk management, cybersecurity, governance, and controls, CFOs can foster a culture of trust and resilience throughout the organisation.
Changes in mandate
The CFO’s role has grown beyond financial expertise to include strategic decision-making, risk and stakeholder management, that's why finance leaders need to possess a diverse skill set that encompasses these areas.
CFOs must also be well-versed in leveraging emerging technologies to boost their business performance.
