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The changing role of the CFO in today’s business landscape

By Karl Smith, Senior ETM Manager at the South African Institute of Professional Accountants (SAIPA)

For many finance professionals, attaining the position of Chief Financial Officer (CFO) is the pinnacle of their career aspirations. The nature of the CFO position may vary depending on the organisation’s size and type. In larger companies, they may hold more topline strategic positions, while in smaller enterprises, they spearhead strategy while engaging with multiple teams at various levels, requiring adaptability and a holistic understanding of the organisation.

However, the CFO role has undergone significant evolution in recent years, reflecting the dynamic nature of modern business environments and the expanding responsibilities of CFOs in driving sustainable growth and innovation.

From operations to strategy

Traditionally, the CFO’s responsibilities revolved around managing financial operations, including accounting, reporting, and budgeting. However, today’s CFOs are expected to not only fulfil this function but to also become strategic thinkers, guiding the organisation’s overall direction and contributing to long-term success. This requires a deep understanding of the business landscape, data analysis skills to identify trends, and the ability to make informed strategic decisions.

Moreover, the modern CFO is increasingly tasked with risk management, including identifying and mitigating various risks such as cyber threats and regulatory compliance issues. Collaboration has also become a key aspect of the CFO’s role, necessitating strong communication and interpersonal skills to work closely with other members of the executive team and stakeholders.

Driving digitisation

With the rise of business digital transformation, CFOs must now be adept at implementing and managing technology solutions that align with the organisation’s goals. This includes embracing technologies like process automation, artificial intelligence tools, and integrated management software packages. Without a deep understanding of the technologies that are driving innovation in their market, CFOs will be unable to drive this digitalisation within their organisation. Successfully embracing digitisation throughout the finance function is crucial for CFOs looking to enhance their organisation’s overall efficiency and effectiveness.

Beyond the bottom line

CFOs are increasingly involved in environmental, social, and governance (ESG) issues, reflecting a broader focus on sustainability and long-term value creation. With investors readily scrutinising the environmental credentials of businesses they choose to invest in, the CFO of today needs to not only understand the business’s ESG strategy, but also play an integral role in ensuring it is adequately funded, effectively implemented, and robustly reported by maintaining the highest assurance standards for the data that is captured.

This expanded role requires CFOs to have a diverse skill set beyond financial expertise, including creativity, open-mindedness, and a keen understanding of technology and data. CFOs are no longer just about the money – they need to maintain an expanded view of business sustainability beyond profit and loss.

The role of the CFO has flourished in recent years, continuing to evolve into that of a strategic partner who plays a crucial role in managing financial operations, mitigating risks, driving collaboration, implementing technology solutions, and addressing ESG issues. As businesses continue to adapt to changing landscapes, CFOs must remain agile and proactive in embracing new challenges and opportunities to drive organisational success.