What does the word chief financial officer (CFO) conjure in your mind? An individual who prevents projects from taking off? One who is trying to control expenditures from all departments? The individual who is pressurising HR to lay off high value, low salary staff while maintaining multiple club memberships for directors?
Or one who is trying to steer the ship through troubled waters and safeguard the company and its assets? The chances are the CFO you know is a mix of all these personalities.
Organisations have to ensure that they maintain liquidity when operating. It is the role of the finance department of companies to ensure that cash is available for these functions and the firm is in a position to meet its obligations always.
This role also extends to acquiring and managing funds and various assets. It is clear that the chief financial officers/ treasurers of organisations have a huge role to play in the management and decision-making process alongside the CEO, chairman and board of directors.
The strategic role of CFO is to be an operator, strategist, steward and a catalyst for change. In the role of a steward, their key duty is protection of vital assets and managing cash flows.
It is their responsibility to report finances with diligence and to ensure there is full compliance with regulations, guiding the investors and boards regarding any risky situations and providing possible well-informed solutions.
As a strategist, the CFO will have a full understanding of the risks and opportunities faced by organisations as they have thorough knowledge of their historical performance as well as market insights.
In this digital age, enterprise value, which is a measure of the company’s total value, is gradually shifting from tangible to intangible and finance functions need to adapt.
Managing digital transformation is one of the main objectives of CFOs. They have to work hard with the teams to strike a balance between change and control.
Ensuring digital investment in innovation while ensuring the security and compliance of the advancement, and mitigating risks.
CFOs must use digital transformation to enhance agility, deliver and safeguard forward looking and secure clouding strategies whilst protecting critical data.
Many CFOs are driving the digitisation agenda and, therefore, they have ethical responsibilities of communicating those data sets to internal stakeholders and external stakeholders fairly and with transparency.
But in this flurry of activities, one must ensure that the primary responsibilities of timely reporting and transparency and having a vision of earning greater revenues to counter expenditures is key. Today, the role of the chief financial officer is under scrutiny, by both internal and external parties.
They have pressure to cut costs, grow revenues, whilst managing overall control of all financial matters. Over the recent period, the economic uncertainty and increased regulatory requirements have brought them into the limelight.
CFOs today must be very creative, have a thorough understanding of best practices, and know how to create more value for the company, especially keeping shareholders in mind.
