As the compliance burden grows, tech drives change and new responsibilities land on the executive desk, the role of the Chief Financial Officer has evolved – often faster than organisations have defined it.
New research confirms that the CFO is the executive most likely to be handed responsibility for tasks that require central oversight but don’t fit neatly into any one area or department.
In some ways, that is a compliment. Financial leaders are trusted to bring commercial discipline to emerging responsibilities around strategy and technology, including AI, ESG, governance, data and cybersecurity.
But with these ballooning responsibilities comes new risk.
Around 82% of business leaders say that the CFO role already includes responsibilities beyond finance, according to Pitcher Partners’ latest Business Radar report. Almost half of respondents said their CFO took care of risk, governance and compliance, and a third said data and analytics, tech and digital oversight were part of their portfolio.
No longer Chief Financial Officer, the Chief Figure-it-out Officer might now have a range of responsibilities, but also gaps in the technical expertise needed to handle them.
Part of the reason is the value financial oversight already brings to the business. Leaders see their CFOs as delivering diverse thinking, better aligned departments and faster decisions, not to mention bringing a dose of financial reality.
And some CFOs are no doubt embracing the new challenges as an opportunity to impress as they work their way up to the big office.
But for those whose core skillset is commercial leadership and financial management, there is a risk that extending into areas outside that expertise creates risk, particularly in high-stakes areas such as managing technology and overseeing governance.
To mitigate this, start with one question: If our CFO is best placed to lead this, what support do they need?
Upskilling is a start. Successful CFOs are expected to be more than accountants – they should be expert project managers skilled at stakeholder management.
Steering an organisation’s technology, data and automation strategy requires investment in learning new areas. A third of business leaders support ongoing skills development, while more than half believe upskilling should include technology, data and AI literacy (54%).
Soft skills are also important – the ability to communicate well, having a healthy level of emotional intelligence, and the self-awareness to bring in additional support as necessary is valued highly.
But investment in skills alone might not be enough to address potential blind spots. It can be challenging to diagnose or resolve problems as they emerge if the CFO isn’t fully aware of the potential risks.
A second support structure has emerged in the rise of the fractional or outsourced CFO, with a wide range of capabilities and expertise at their disposal.
Over half of business leaders surveyed for the Business Radar report viewed fractional or outsourced CFO models as a viable option, recognising that an outsourced CFO who is backed by data and analytics experts, as well as ESG and audit specialists, could access the depth of skills necessary to deliver on a broader remit.
It’s interesting the way this trend is developing in different parts of the country. In NSW, for example, business leaders are more likely to outsource financial manager responsibilities while they are recruiting for an internal role, while in Queensland they are increasingly seeking ongoing external support on a part-time basis.
CFOs are no longer just financial stewards. Their remit increasingly spans data and analytics, compliance, technology, and other critical functions that don’t fit neatly anywhere else.
The CFO of the future will need to lead complex initiatives, manage stakeholders across the business, and translate between finance, technology, and operations. But expanding the role is not enough on its own.
Moving past the ‘figure-it-out’ mindset and avoiding finance becoming the default owner of everything, particularly without the required support, is necessary to manage risks and support people.
For organisations to set up their CFO for success, they must invest in the right skills and support structures. That may mean accessing specialist expertise in data and analytics, ESG, and audit through outsourcing, rather than expecting one leader to absorb every responsibility.
The real opportunity for business leaders is to define accountability clearly, especially across ESG, data, and compliance, and build stronger organisations by matching responsibility with capability.
