Finance Psyche

The general perception of the role of a Chief Financial Officer is usually that of an individual who oversees a company’s financial affairs and facilitates the availability of funds for the actualisation of its goals. While this may be true, the influence of the modern CFO extends beyond the financial arm of a company. As Paul Ainsworth (a seasoned CFO with over 30 years of experience) notes, the modern CFO is more of a strategic player in the company’s echelons than the head of a team of number crunchers.

This assertion is true, especially in the post-COVID era where organisations must find unique avenues for growth while minimising costs and providing quality services or goods. A report by McKinsey & Company states that four out of ten CFOs already have roles that extend beyond the traditional jurisdiction of financial affairs.  In the wake of the current peculiar business environment where Sustainable growth and Integrated reporting have been the core of organizations’ performance, the CFO role has become more demanding and wider in its purview.

CFOs can develop new growth trajectories through strategic intra-department partnerships

• As finances are the life blood of every company, CFOs can use their financial acumen to identify new investment or expansion opportunities while collaborating with the heads of other departments to solidify the expansion avenues.
• Such collaborations could be with key players like the Chief Strategy Officer and Chief Technology Officer to identify new technologies, market opportunities and prime real estate for long-term profit making.
• Experts have also noted that CFOs must also liaise with the Chief Human Relations Officer in times of recovery from economic instability. Both individuals can use relevant financial tenets to devise practical metrics for attracting and retaining talent that can foster productivity; thereby maintaining stability in the organization’s structure and production.

CFOs can improve the financial orientation of other employees

• To help in steering the company towards steady growth and financial stability, CFOs must ensure that employees in various departments have an accurate understanding of financial and business concepts.
• This will empower these individuals to identify practical opportunities for expansion and growth through their own lenses.
• This can be done by clear communication of the company’s financial data and by creating seminars or short courses to boost their knowledge of finances and business strategy.
• Moreover, developing business acumen in other employees promotes efficiency and shrewdness in performing their tasks.
• The CFO can also use data insights and records of cash flow to reorientate other employees on how to optimise resources and reduce expenditure while maintaining product quality; thus, utilising the company’s revenue with prudence and effectiveness.

CFOs need to adeptly cultivate and manage stakeholder relationships

• CFOs need to create a balance between regulatory adherence and stakeholder or investor demands.
• A report by Ernst & Young Consulting asserts that 71% of CFOs have noted their increasing involvement in ensuring ethical decision making regarding the aims of organizations.
• This shows that CFOs must devise strategies to address conflicting demands from stakeholders and ensure proper compliance with regulations.
• Achieving this will require excellent communication and mediation skills, as well as persuasive abilities to keep stakeholders aware of the company’s values.

CFOs must accurately identify strengths and initiatives that create value

• When companies are under pressure to develop capability or undergo transformation, various initiatives are engineered to meet the set goals.
• However, there is a tendency for development ventures to be overvalued due to a lack of sufficient valuation, while others with a high propensity for growth are ignored.
• Therefore, the CFO must properly utilise financial and operational data to ensure the company devotes its attention and resources to valuable improvement or growth initiatives.

CFOs must actively participate in the development of strategies for building capabilities.

• When business executives strategize to position the country for growth, while leveraging new market opportunities or technology, it is vital that the CFO take a front-row seat.
• This is because, CFOs have the knowledge of the company’s finances and risk mitigation techniques to facilitate the execution of initiatives.
• Moreover, the CFO has the ability to help other key players set realistic expectations for the growth venture, in terms of execution and ROI.
• Therefore, the inclusion of the CFO in strategic planning provides realistic input on the goal setting process and actualisation.

CFOs should spearhead the digital reformation of the company

• A recent study by Randstad’s 2025 Workplace study shows that only 10 percent of global companies are currently attuned to digitalisation.
• In lieu of this, these companies have a 28 percent chance of reporting higher revenue streams, compared to organisations with a lukewarm approach to digitalisation.
• Hence, the CFO must set the pace as a digital leader with the proof of their competence to do so.
• The implication of this pivotal change is that the CFO must be proactive in strategy development, the organization’s technological advancement, and financial stability, to ensure steady growth and capability development.

Final thoughts

The blurry nature of the modern CFO’s role is more advantageous than it might seem. Without a rigid definition of responsibilities, CFOs get to make more contributions and impact decision-making processes and the development of the company’s internal structure. To do this, however, CFOs must develop leadership and communication skills and cultivate the zest for innovation and disruptive growth.