CFOs lifeline during GFC, not CEOs
Chief financial officers (CFOs), rather than the chief executive, were the lifeline for many organisations during the global financial crisis (GFC), according to Ernst & Young (EY).
The firm's report on CFOs and chief executives (CEOs), found CFOs have broadened their focus beyond their traditional scorekeeper role, and CEOs have relied more and more of their CFO's insights to drive business decisions, to represent the organisation's goals to external stakeholders, and to help develop overall strategy.
"During the GFC, the CFO was thrust into the limelight, as their skills and experience in financing and cost management provided a lifeline for many organisations," the report said.
"They [CFOs] had found themselves at centre stage, as their CEOs turned to them to find cost reduction, and financial management strategies to help them shield against the economy's downward momentum.
"As they stepped up to the challenge, financial leaders emerged as the key ally of the CEO."
The report found 76 per cent of CFOs surveyed had increased their involvement in corporate strategy.
However, CFOs said the main contributions they make in working with the CEO on merger and acquisition decisions, operating model redesign, measuring organisational performance, and the shift to digital, are cost management and setting budgets.
EY global financial performance improvement advisory leader, Tony Klimas said to partner in a strategic way with the CEO, CFOs need to redefine the principles of the financial function.
"The CFO should be able to trust their finance leadership team and keep some distance from each of these activities to dedicate more time to collaborating with the CEO on strategic matters," Klimas said.
The report said CFOs need to be able to balance strict financial discipline with higher risk initiatives that will drive bold innovation and growth.
Lanitis Group of Companies group CEO, Costas Charitou said: "A CFO that only thinks of numbers would miss out on the business opportunities and the decisions we need to take.
"You need someone with the awareness of the market, competition and future growth opportunities," he said.
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