The DNA of the CFO
The public face of company performance
The CFO’s unique overview of business fundamentals, their role as “conscience” of the organization and their fact-based training means that a diverse group of stakeholders are looking to CFOs for the answers.
Yet, the increasing demand for mastery of communication skills as a quality of leadership presents CFOs with perhaps their greatest challenge going forward.
Almost two-thirds of respondents say that, increasingly, the CFO has to act as the face of the company on all issues related to overall financial performance. A similar proportion agrees that, following the crisis, the CFO’s key priority is to increase trust in the financial health of their business.
But, relationships with external stakeholders, such as investors, analysts and the media, are a challenge for many. Less than half of respondents say that their relationship with investors is good or excellent, while just 25% offer a similar assessment for the media and 21% give a similar rating to their relationship with governments.
Indeed, these “softer skills” seem to be an issue for many CFOs. Asked where they need to enhance their skills and knowledge, respondents point to communication and influencing as the most important area for improvement.
Percentage of respondents who believe these stakeholder relationships are in need of improvement
Shown: Percentage of respondents
Base: all respondents (669)
What investors are looking for
The cornerstone of building trust with investors is excellent financial reporting — clean, clear, consistent and comprehensive information. Investors expect more than statutory or compliant reporting. Indeed, this alone is a sign of a lack of transparency. They demand metrics which are broader than just the financials and a forward, realistic view of company performance. In short, investors expect a joined-up story — linking company strategy, financial performance, risk management and operational effectiveness.
- Keep it simple: numbers should be clean and clear without error. They should be consistent year to year, preferably adopting conservative accounting policies.
- Demonstrate how capital is managed.
- Go beyond the statutory reporting and provide a comprehensive and well-presented description of the business.
- Join up the different aspects of reporting to create a wide view of the business.
- Provide the non-financial KPIs that support past and future performance delivery.
- Focus on the future: short-term returns are important but not at the expense of delivering on the longer-term plan.
- Detail how the business manages risk.
- Demonstrate an awareness of wider stakeholders — employees and customers.
- Be proactive, timely and front experienced people, such as the CFO, who can explain as well as disclose.
- Build trust in the quality of the finance team — give them the opportunity to demonstrate understanding, experience and capability.
- Ensure leadership demonstrates integrity at all times.