A CFO's Competencies for the Future

Learn what key skill sets will be redundant in the next three years and what roles and competencies will become more essential. It provides a guideline for CFOs to deal with an unknowable future.

31 January 2017
 
In the face of the changing business landscape where volatility, uncertainty, risk, ambiguity and disruption are becoming more prevalent, the role of the CFO has undergone several evolutions and is thought to go through several more. 
 
According to a published 2013 discussion paper from the International Federation of Accountants (IFAC), the roles of a CFO are susceptible to changing expectations, scope and mandate. How these changing expectations and roles impact a business or the sustainability of it, remains an open debate. 
 
However, there are key requirements that prevail in the face of external changes and trends. The five principles, according to IFAC*, guiding a professional CFO, dictate that a CFO should:
 
  • Be an effective organizational leader and a key member of senior management;
  • Balance the responsibilities of stewardship with business partnership;
  • Act as the integrator and navigator for the organization;
  • Be an effective leader of the finance and accounting function; and
  • Bring professional qualities to the role and the organization.
 
A CFO’s role has changed over the years. It is said it will change again, and probably much sooner than some are prepared for. Think three years instead of ten. In addition to being competent, a CFO now needs to be versatile. How will this evolving versatility dictate new professional competencies
required of the CFO in the future?
 
Organisations are finding it more challenging and difficult to sustain business success. The dynamics of business are changing and finance professionals are discovering the need to make better decisions faster just to keep up. The conversation now revolves around how the future is no longer calculable by a forecasts set in years; often, forecasts become estimates in the face of changeable and exceedingly-fluid business plans.
 
This is not an exaggeration or dramatization; what we once thought of as inconceivable can now happen. Brexit is a key example. Digitisation - the Fourth Industrial Revolution - is another.
Sustainability now means a business has to fight to retain its spot and relevance in the market, and
perhaps even more following the onslaught of innovators, new entrants and upstarts who have rocked the status quo.
 
Despite the best of predictive analyses, disruptions still take organisations almost by surprise when they actually happen. Technology is changing the face of business, but so is business within itself. The traditional brick-and-mortar business model is no longer the rule of thumb, and systems and processes change organically or are forced to change. Some new processes have been borne out of market demand. Nobody would have thought a decade ago that we could pay our bills or for our groceries using a wireless, hand-held phone. Ambiguity, too, is a concern, where businesses deal with rules and regulations and operating beyond the local market, with ensuing complications across different countries. Therefore, we need to look at the ability of the finance and accounting professionals to provide reliable insight and order in compliance work, in the face of this ambiguity.
 
How does a CFO remain relevant for the future? What key skill sets will be redundant in the next three years and what roles and competencies will become more essential? This report attempts to answer those questions with the help of research, numerous valuable insights and the sharing of experiences from all roundtable panellists, with the intent of providing a guideline for forward-looking and aspiring CFOs to deal with an unknowable future.
 
* IFAC - International Federation of Accountants
 

CLICK HERE TO DOWNLOAD THE REPORT FROM CIMA

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