Finance functions face important choices about where to place focus

London, 20 May 2008 — Chief Financial Officers’ roles have expanded dramatically over the last decade, and individuals are struggling to meet the demands they face according to a survey of 251 of the world’s most powerful business people published today by professional services organization Ernst & Young. The survey, "What’s next for the CFO? Where ambition meets reality", shows that while 97% of these C-suite respondents acknowledge that CFOs’ roles have grown broader, nearly one-third believe that CFOs do not have enough understanding of the wider issues their businesses face.

The survey confirms that although the traditional skills of the finance function are still a pre-requisite for successful CFOs, more is required: 88% of respondents state that ‘being good with numbers’ is no longer enough.

“CFOs are being pulled in all directions and ultimately this is not sustainable” says Norman Lonergan, Global Advisory Services leader for Ernst & Young. “They are being asked to be business partners to their CEOs and commentators to their boards, as well as their more traditional roles as score-keepers of financial performance and custodians of risk management.

“Facing these huge demands, CFOs are finding themselves at a crossroads, where they can choose to either limit themselves to technical accounting or focus on more strategic functions,” Lonergan continues. “If they want to concentrate on their strategic roles they need to streamline their scorekeeping and custodial roles, focus more on integrating financial and non-financial information, and build talented teams to share the workload.”

Other findings of the survey include:

• The factors that have contributed most to the CFOs changing role were regulatory and compliance obligations (cited by 43%); increasing expectations of the board and the audit committee (38%); and increasing corporate governance obligations (35%).
• There is a gap between where respondents feel CFOs should spend their time and where they actually do — 35% felt that CFOs should dedicate their time to working as a strategic business partner to the CEO, whereas in reality only 26% feel this is where CFOs spend their time.
• Respondents say that finance functions collaborate effectively with functions such as tax, treasury and IT, but less well with research and development; marketing; and sales and distribution.

About the survey
For "What’s next for the CFO? Where ambition meets reality", the Economist Intelligence Unit interviewed 251 C-suite and board-level executives. The respondents included a significant number of CFOs drawn equally from the US, Europe and Asia. All respondents worked for businesses with a turnover of more than US$1billion which represented a wide range of industries.

About Ernst & Young
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