EY’s DNA of the CFO survey of 769 finance leaders has found that number crunching is no longer the be-all and end-all of the CFO’s role, with skills that can help inspire and generate loyalty such as empathy, innovation and imagination becoming equally important.
Unlike traditional CFOs whose main focus is finance, next-generation CFOs will need to build careers with a wide range of experiences and roles in order to develop capability and efficiency in key areas in addition to finance.
More than half of respondents stressed that aspiring finance leaders need to develop leadership and team-building skills and must be prepared to go beyond number counting if they want to transition to a CFO role in the next five years as the traditional path to leadership becomes increasingly disrupted.
Hanne Jesca Bax, EY EMEIA managing partner markets and accounts
The CFO role, like many other roles, is at a turning point
The next generation of CFOs will need to change their communication styles to become highly adaptive with a greater emphasis on digital channels and formats in reaching internal and external stakeholders effectively.
Measuring performance against purpose will also increasingly become part of the CFO role, as organisations look to demonstrate to internal and external stakeholders the impact of purpose-led organisations, the survey revealed.
Hanne Jesca Bax, EY EMEIA managing partner markets and accounts, said, “The CFO role, like many other roles, is at a turning point. As finance organisations face a more connected, globalised and heavily scrutinised future, tomorrow’s finance leaders need to think strategically about the know-how and experiences they will need to succeed in the future.
“Only those who will be quick and versatile in adapting the profiles, experiences and skills to the strategy, culture and maturity of a particular business or industry will have access to finance leadership roles,” Bax added.
The CFOs surveyed by EY identified some key initiative that would enable the development of next-generation finance leaders.
Almost half of respondents recommended offering emerging leaders the opportunity to lead a major transformation project. Meanwhile 38% suggested mentoring and coaching from group CFO or other senior finance executives and a further 38% recommended making talent development a key performance indicator for CFOs.
Abilities such as “strategy design and planning” and “commercial experience and understanding of the drivers of business value”, emerged among the top three elements in equipping future finance leaders to transition to the CFO role.
A recent survey by ICAEW also identified communication skills, likeability, leadership, commercial awareness and an entrepreneurial mindset as the most important skills needed to succeed in senior finance roles.
According to the survey, finance directors, chief financial officers and senior partners believe that being technically competent and having the so-called “soft skills” are the foundations of success for senior finance roles.
EY’s survey also highlighted the importance of increasing the number of female finance leaders.
Two thirds of the finance leaders surveyed said organisations will need to recruit from diverse pools of talent to find the next-generation of finance leaders.
More than half of female respondents (57%) and almost half of male respondents (49%) believe that not enough female future finance leaders are emerging; according to 62% of the respondents “visibility for women leaders who can act as role models for more junior employees” is the top strategy to increase appointments of female finance executives to the CFO position.
Bax added, “Diversity is key to high-performance and when it comes to the finance function women are still highly outnumbered. However companies are increasingly becoming aware of the importance of having a more balanced finance leadership.
“Creating development paths will be crucial for making the finance senior leadership accessible for women. We are optimistic that awareness around the issue will encourage more future women CFOs.”
A recent report by Sir Philip Hampton, chair of GlaxoSmithKline, and Dame Helen Alexander, chair of UBM called for FTSE 100 companies to have a minimum of positions in their executive pipeline filled by women by 2020.