Can CFOs step out from behind the ledger and into the strategic spotlight? The key lies in mastering financial management, embracing digital transformation and team-building.
Twenty years ago, Associate Professor Paul Thambar was a Chief Financial Officer in the banking industry, balancing the books while yearning for a seat at the strategy table.
“I wanted to have a greater impact on company decisions and direction,” he said. “But the message from my CEO was clear: get the financials right first, then we’ll talk strategy.”
In his recent whitepaper, A/Prof Thambar discovered perceptions about the role have changed little over the past two decades.
The 18-month study, based on interviews with 12 CFOs from Australia and Sri Lanka, revealed CFOs continue to grapple with the same tension between financial stewardship and strategic leadership.
“There was a real sense of déjà vu for me while conducting the study,” he said.
“I found that CFOs still want to expand their horizons in the organisation and be value-adding business partners, but they often find themselves kept at arm’s length because they’re considered ‘just the numbers person’.”
Great expectations: Navigating the CFO conundrum
One major challenge, according to A/Prof Thambar’s study, is that the CFO role remains shrouded in ambiguity.
While many finance and accounting positions are well-defined, the responsibilities of a CFO remain unclear due to the varied and competing expectations of the role.
Under intense pressure to deliver accurate, timely financial reporting, CFOs are also expected to drive digital transformation, be a valued business partner and mentor staff.
“CFOs experience these ambiguous expectations because their senior and operational managers expect them to balance their controllership and business partner roles while supporting emerging areas such as digital transformation,” he said.
Building trust: The cornerstone of CFO Leadership
A/Prof Thambar believes this ambiguity can be turned into an advantage.
CFOs who deliver accurate and timely financial information while also demonstrating a deep understanding of the business are more likely to be seen as leaders, he said.
“Delivering the core functions of accounting and finance successfully enables the CFO to take a legitimate role around the leadership and board table as a business partner and strategic advisor,” he said.
“It’s about proving your worth as a financial steward, and building trust and credibility, before expanding your role.”
Leading the digital charge: CFOs at the forefront
CFOs are increasingly at the forefront of digital transformation, playing a crucial role in implementing new technologies and streamlining financial processes.
As early adopters, A/Prof Thambar said CFOs can leverage digital tools to enhance data accuracy and provide real-time insights to support strategic decision-making.
“One of the study’s key findings is that CFOs are often called upon to lead or significantly contribute to digital transformation,” he said.
“Those who navigate the digital landscape effectively not only enhance their department’s efficiency but also reinforce their position as strategic partners,” he said.
Beyond the numbers: Shaping tomorrow’s leaders
To be seen as strategic leaders, A/Prof Thambar said CFOs should also focus on building capability within their own teams.
“CFOs need to be seen as strategic leaders who can develop junior accounting staff into more than just technically competent managers,” he said.
“The ability of the CFO to role-model appropriate leadership skills and develop a capable accounting team will help position the CFO and his team as vital and valuable business partners for the organisation.”
A strategic future: The evolving role of the CFO
A/Prof Thambar said as the role of CFO continued to evolve, the ability to balance financial and strategic leadership responsibilities would become increasingly important.
“CFOs are vital members of the leadership team in any organisation, with an important role to play in many of the emerging issues, such as sustainability and environmental, social and governance reporting,” he said.
The ability to fulfil this role was enhanced when CFOs excelled in their core responsibilities of financial reporting and information provision.
“By embracing their dual role as both financial stewards and strategic partners, CFOs can secure their place at the leadership table and drive meaningful impact within their organisations,” he said.
The study was funded by the American Institute of CPAs and The Chartered Institute of Management Accountants.
To view the white paper, please visit: The Chief Financial Officer (CFO): A study of role expectations, conflicts and ambiguity
