Disruption forcing CFO to go beyond numbers

Any chief finance officer (CFO) who still thinks his main role is to balance the books and file tax returns will soon be out of a job. Rapid and dramatic changes sweeping the business landscape are forcing CFO to break the mold and play more strategic roles to ensure that their company does not lag behind those who adapt quickly.

“Nowadays, the role of the CFO goes beyond being a bean counter, a number cruncher or a compliance manager. He or she is not just a strategic partner of the CEO in the organization, but also plays a critical role in these times of disruption and volatility,” said Hans Sicat, country manager of ING Bank, N.V. Manila Branch, which sponsors the ING FINEX CFO of the Year Award together with the Financial Executives Institute of the Philippines (FINEX).

The annual search, which is enticing local or foreign-owned and privately held or publicly listed companies operating in the Philippines to nominate their CFO until 31 August 2018, usually attracts the so-called “brave hearts” of the local financial community. This is even more so in recent years when the macroeconomic environment has become more volatile, more global and more interconnected.

Last year’s CFO of the Year awardee, Jose Teodoro Limcaoco, CFO of Ayala Corporation, said what keeps CFO up at night is fear of the unknown.

“We can talk about the trade war or the developments locally, like what move the Bangko Sentral ng Pilipinas is taking and what’s happening in politics, but what keeps you up is what you don’t know and that’s what you’ve got to be prepared for. You’ve got to be aware of what’s happening, what resources are behind you at all times,” he said in a recent interview on ABS-CBN News Channel’s Early Edition.

This is where fluency in digital technology plays an essential part of a CFO’s DNA. To effectively manage the growing burden of regulatory controls, be a proactive advisor to the organization and ensure a focus on the bottom line, today’s CFO needs a good grasp of technology to derive timely information and insights into the rapidly changing and highly competitive business environment.

According to 2018 CFO Insights on New Technologies by audit, tax and advisory firm Grant Thornton LLP in partnership with CFO Research, 89 percent of CFO surveyed have “confirmed the assumption that CFO will have to assume many more responsibilities related to technology in the future.”

The study surveyed 304 CFO and other senior financial leaders from companies with revenues between $100 million and over $20 billion.

“As new technologies are increasingly infiltrating the finance function, the role of the CFO is shifting to require an updated set of technical skills. In the short to long-term future, CFO will need a strong technical background… What will be required of future CFO is a technical mindset that will include a strong understanding of the risks that new technologies bring about,” the study revealed.