Results from several recent surveys suggest the role of the CFO is changing and expanding into new challenges such as cybersecurity and event response.
Following a tumultuous end to 2016, the business world is becoming more accustomed to unpredictability. Although there is reason to be cautious about what events will hold for CFOs during the remainder of 2017, there is also reason to be optimistic. A likely cut in corporation tax should bring a welcome boost to business, while technological advancements should help business leaders be better prepared for future unpredictability.
However, technological advancements alone will not enable a business to manage its way through a changing landscape, and CFOs – having the responsibility to ensure the financial stability of their companies – are having to step up and tackle many non-financial challenges such as HIPAA compliance and GDPR compliance. Indeed, according to one study by Adaptive Insights, 76% of CFOs report their finance teams track some non-financial KPIs today, and 46% of CFOs anticipate that number will increase in the next two years.
Cybersecurity the Biggest Challenge
As CFOs control the most sensitive data within companies, it could be argued it is the CFOs responsibility to control how the sensitive data is protected. Managing cybersecurity threats is a whole-of-company challenge but, as the finance function becomes more business-centric, CFOs are drawing on their risk management know-how and becoming more involved in risks assessments, addressing vulnerabilities, and breach recovery planning.
An increasing number of CFOs have been involved in cybersecurity since the Framework for Improving Critical Infrastructure Cybersecurity Version 1.0 was released in January 2014 and, in a recent Grant Thornton survey of 912 CFOs, 38% of respondents identified the CFO as the position most often responsible for cybersecurity, while 44% of finance leaders said they felt the most significant concern for their organization today is cybersecurity. 57% said undetected breaches were what worried them the most.
Adopting to Technology for Event Response
In addition to cybersecurity governorship, CFOs are having to educate themselves about technological advancements to help them measure and monitor business performance in a timely manner, without exposing the business to risk, but enabling it to take advantage of every possible opportunity. The technology allowing data to be processed in real time can help with identifying risks at an earlier stage and better decision-making, but many CFOs are encumbered by legacy systems that do not allow reporting teams to extract forward-looking insight from large, fast-changing data sets.
This challenge, and trends towards zero-based budgets and rolling forecasts, mean that CFOs have to be more agile. No longer is it enough to put an annual plan together and crunch the numbers month by month. EY’s DNA of the CFO survey reinforced this perception of a CFOs changing role when respondents to its survey said that skills that can help inspire and generate loyalty such as empathy, innovation and imagination becoming equally important as those used to manage finance teams.