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The CFO’s changing role

Changing capital markets, deregulation and globalisation require financial professionals to go beyond reporting on the past, according to a white paper published by SAS.

Driven by regulation, restructuring, increased accountability and shareholder scrutiny, the role of the chief financial officer (CFO) has expanded in recent years.

Some companies have passed on the duties of a chief operating officer to the CFO. In addition, mergers and acquisitions have plunged CFOs deep into negotiations around business development, corporate culture, human capital and marketing.

Even when it comes to reporting, the CFO’s horizons have broadened. Financial management used to mean little more than reporting historical results of legal entities. However, changing capital markets, deregulation and globalisation require financial professionals to go beyond reporting on the past; they must also interpret past results for their impact on the current business environment to plan for the future. In the increasingly competitive environment, investment analysts want to know how companies will create value in the years ahead; raw financial figures simply don’t tell them that.

Investment analysts now want to know about “intangible” assets and business drivers, such as customer relationships, potential operational risks and unprofitable services and products. Legal requirements such as Sarbanes-Oxley require CFOs to engage in costly efforts to gather data from a range of sources across the enterprise. With heightened scrutiny, organisations must have unwavering confidence in their financial reports.

In short, CFOs now have to understand the entire business. CFOs have changed — they have become key strategic advisers and decision-makers who assess opportunities and threats to help set company strategy. This new role requires a much broader view of the company, yet most CFOs still struggle to close accounts and meet statutory reporting requirements.

As the trustee of corporate information, the CFO is typically the closest adviser to the CEO. SAS can help CFOs address many key challenges as they adapt to their changing roles.

Click here to read the full report


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