The chief financial officer (CFO) will emerge as one of the C-suite’s most critical roles in reframing the future of the enterprise post the COVID-19 pandemic and beyond, according to the 2020 EY DNA of the CFO, a survey of more than 800 global CFOs and senior finance executives.
“The pressure on CFO to not only be problems solver but also business enablers is a clear outcome of 2020 EY DNA of the CFO survey. This will require Finance Executives to adapt their mission to fit the environment by understanding and implementing efficient digitalization, opening up and driving the Long Term Value agenda of the company and ensure the adhesion of all stakeholders. We could see their roadmap as being “Building sustainable and resilient business for growth”. This does not exclude their traditional areas of responsibilities around accounting, reporting and controlling, but requires new nonfinancial performance indicators as well as strong connection to their C-level peers. CFO in Romania have an ecosystem to support such a change with an economic environment pushing for sustainability as well as a young adaptable talent pool to drive the change”, says Guillaume Macczak, Associate Partner CFO & GBS Services, EY Romania.
Describing their future priorities, 86% of respondents say they will be required to protect their organization today, while enabling future growth. At the same time, 84% agree that achieving a balance between short-term results and creating long-term value will become a priority. This will also include traditional mandates, such as corporate reporting, along with new ones like overseeing digital transformation.
As they deliver on these priorities, CFOs will also need to enhance relationships with their fellow C-suite peers. The survey, however, found 52% of responding finance leaders reported limited or no collaboration with the chief human resources officer (CHRO) with 44% saying the same of their relationship with the chief marketing officer (CMO).
CFOs as stewards of long-term value
In a shift mirroring market trends in 2020, CFOs recognize the importance of a purpose-driven strategy, with 82% of respondents saying that they are increasingly seen by key stakeholders as the stewards of long-term value, according to the 2020 EY DNA of the CFO.
In addition, 79% of respondents say that investors are increasingly requiring much more information on how their organization creates long-term value for all stakeholders, while 81% believe there is significant value for their organization that is not measured or communicated using financial KPIs.
Reframing the finance function
According to the 2020 EY DNA of the CFO, the performance of markets is fundamentally changing. New virtual markets are emerging as platform-based giants connect buyers and sellers in a more seamless way, and new technologies converge to eliminate even more inefficiencies and frictions.
A more fluid operating model that extends beyond the enterprise’s four walls will likely be a key factor in enabling finance to play a central role in the connected markets of the future. Many finance leaders see this more open future for the function becoming reality over the next five years. More than three-quarters (77%) of respondents believe that, by 2025, finance IT will be cloud-native rather than on-premise, and 74% believe the function will be part of a blockchain-based ecosystem.