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Onward and Upward for CFOs

Finance chiefs continue to take on more operational responsibilities and occupy seats on corporate boards, according to a new survey.

By Treasury & Risk Staff | Updated on July 30, 2013

The finance function is playing an increasingly pivotal role in corporate operations. In many companies, the leader of finance is seen as a prospective successor to the CEO, and more and more CFOs are beginning to serve on corporate boards of directors. These bits of conventional wisdom are borne out by a recent survey by Korn/Ferry International.

073013_Korn Ferry_Figure 1The firm’s Chief Financial Officer Center of Expertise polled 86 CFOs at large organizations and found that these leaders’ scope of influence is growing. When asked “Are you being asked to take on more or less operational responsibility?” three-quarters said they’re taking on more operational responsibility; one-quarter said they’re currently experiencing no change in their level of operational responsibility; and not one said they’re being asked to reduce the operational side of their role. (See Figure 1.)

Perhaps even more telling were the CFOs’ responses when asked what keeps them up at night. Their top concern—cited by just over half of survey respondents—is revenue growth. Cost management worries only 16.5 percent of respondents. (See Figure 2, below.) “The natural play for the CFO has historically been around cost containment and cost control,” says Josh Wimberley, head of the Financial Officer Practice, North America, at Korn/Ferry. “But right now, it’s all hands on deck for revenue growth and innovation, and the CFO has to be involved in that.”

Wimberley sees two primary drivers behind the shift to more operational responsibility for finance. “First, CFOs need to be more involved in the operational drivers of the business,” he says. “Boards, CEOs, and management teams are looking to CFOs to play more of an operational role. At the same time, there’s a push for boards and CEOs to be more proactive around succession planning. Because the CFO’s position is one of the potential successors to the CEO position, there’s a push—whether formal or informal—to have CFOs take on more operational responsibility in the business. In some cases, that means going out and running a business as president and general manager. In other cases, the CFO takes on a small P&L in addition to their CFO responsibilities.”

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