The role of the Chief Financial Officer (CFO) varies from managing the day-to-day finances of a business to operating as the CEO’s No.2 and guiding the organisation’s strategy. At the Institute of Chartered Accountants in England and Wales’ (ICAEW) CFO conference, the following recommendations emerged for CFOs who are looking to increase their influence within organisational strategy and ensure they’re at forefront of decision making:
1. Separate yourself from the finances
The most strategic CFOs spend a significant proportion of their time on organisation wide issues and step back from the day-to-day management of the finance department. Strategic CFOs tend to have a No.2 who they trust to manage day-to-day issues and who are the ‘go to’ person for all questions on the accounts. This creates the time and head space for them to dedicate to the organisation’s strategy, and enables them to be the CFO who not only understands the figures but forms a strategy around them.
2. Provide your opinion
As CFO your opinion is valued, but few CFOs leverage this by formalising their opinion within the papers they write to the Executive Team and the Board. A strategic CFO will start their papers with their opinion on the company’s finances and what they mean for the business. They will then explain the management information provided, not by repeating the figures within the graphs or tables but by explaining the drivers behind these figures, the ‘so what?’ for the business and the action they recommend is taken in response.
3. Drive the debate in the boardroom
The data you provide as CFO stimulates the conversation in the executive meeting or boardroom. Many CFOs provide a full set of financials at each meeting, but this overloads the reader and makes it difficult to know where to focus. The most strategic CFOs draw out the 3-5 questions that are the most pertinent and provide data and their opinion around them. They then set the questions that the executive and board will discuss and the agenda for strategic discussion.
4. Highlight the major economic and market risks to the organisation
CFOs are increasingly expected to be aware of and advise on major economic and sector challenges to the business. You will likely receive economic and market data and have connections with other CFOs. Use these to help build your own view of likely risks and their impact on the business, and feed these into discussions on your organisation’s strategy.
5. Know the whole business
As CFO you are justified in probing into all areas of the business. Use this to meet with department heads and ensure you understand your customers, your operations and the main business functions. This will help you build a picture of the business as a whole and identify where each department’s strategy needs to change or future opportunities for the business.
I had the pleasure of discussing these themes with Tim Haywood (CFO Interserve) and Madeleine Stokstad (CFO RWS group) at the ICAEW CFO conference on October 13th 2016.
Natasha Szczepanik is Practice Head of Board Intelligence, working with CFOs across the public and private sector to identify the value drivers of their business.To find out more about any of these recommendations contact Natasha.