Chief Financial Officers (CFO) roles are evolving. In addition to risk planning and focusing on business growth, their new responsibilities include mergers and acquisitions, corporate strategy, and governance.
A recent global survey from Egon Zehnder finds that CFOs are energized by the new expectations, with more than 80% saying their role has expanded significantly in the past five years. Unfortunately, the additional work is not proving to be helpful as a stepping stone to the role of CEO, which is a desire of 60% of respondents.
The survey highlights five key findings.
Evolving CFO Role
The top three new responsibilities for CFOs are Environmental and Social Governance (ESG) at 55%, Mergers & Acquisitions/Corporate Development (M&A) at 44%, and Corporate Strategy at 38%. Driving change was overwhelmingly the top competency needed over the coming five years at 41%, followed by shaping strategy at 25%.
“Reflecting on the actual and desired time they are able to allocate to core financial aspects of their role, CFOs told us there is a gap: strategy, developing finance talent, partnering with other business leaders, and capital allocation were the top areas they would like to spend more time on.”
Work-Life Balance
Overall, 80% of CFOs rate their work-life balance as okay or good. Some of the reasons cited include cycling to work, getting eight hours of sleep, having hobbies, eating healthy, and going with the flow to seamlessly blend work and personal lives.
Attracting Finance Talent
“Layoffs, tough labor markets, increase in demands of roles, and skills gaps are some of the major reasons behind this struggle for talent, according to CFOs.” On average, more than 40% of respondents said finding talent is more difficult than two years ago.
The top three strategies for building a solid team include providing open and honest feedback, which 63% of respondents cited. 55% said it was rotating top talent into different areas of finance. And 52% mentioned targeted development programs.
CFO Career Motivations
Nearly half of CFOs said they are being contacted monthly for new opportunities. The most important factors for consideration include the quality of the executive team at 60%, growth prospects at 45%, and tied at roughly one-third of respondents are board mandate and compensation.
From CFO to CEO
For those looking to rise to the CEO office, 46% of respondents cite networking and visibility as the top challenges. Next is customer and market knowledge, at 30%, and operational expertise, at 25%. Of the 60% who plan to become CEO, 70% believe they are ready now. This is especially true for CFOs who are non-executive directors on boards and multi-time CFOs.
CFOs are excited about the responsibilities that take them beyond their core work. They see themselves as strategic leaders in the organization. With the majority having designs on the role of CEO, some believe they are almost there, while others are concerned that new demands may be too much to handle without help from others in the C-suite.
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