Traditionally, CFOs’ strengths tend to be defined in terms of their approach to rational, analysis-based decision-making, rather than the capabilities that are important for empathetic communication. Respondents believe that CFOs still have work to do to improve these “softer” skills.
Shifting the emphasis from shareholders to stakeholders
There is also a growing acceptance that CFOs should not focus narrowly on short-term profit targets but, instead, seek longer-term growth and returns. Their purpose-led organizations should be providing value for stakeholders that go beyond shareholders, including employees, consumers and local communities.
The survey results demonstrate this strategic shift of emphasis for private companies. Eighty-six percent agreed with the statement that “CFOs are increasingly seen by key stakeholders as the stewards of long-term value.”
But, of course, short-term financial performance cannot be ignored. Eighty-five percent agreed with the statement that “CFOs must balance the need for short-term results with a focus on long-term value.”
The tech-savvy CFO
CFOs are also taking on a wider role in terms of technology. Data is becoming an increasingly valuable commodity, and the CFO is well placed to leverage this effectively. Such a transformation goes beyond the finance function, often embracing the whole enterprise and supported by new technologies such as AI, robotic process automation and blockchain.
The survey results show that private company CFOs and their finance teams are ahead of their C-suite colleagues in this revolution. When asked if the finance function is “seen as identifying opportunities to utilize new technologies, such as AI, quicker than other teams,” 84% of respondents agreed. The finance function also rates highly in terms of innovation, agility and culture (see table).
The CFO in a post-COVID world
Private company CFOs have come a long way in recent years and are now considered strategic business partners, stewards of long-term value and technological innovators. The finance function is regarded as the strategic center of many organizations.
However, the COVID-19 pandemic has reinforced the importance of empathy and emotional intelligence as leadership qualities. Many CFOs have adopted more frequent, empathetic and human communication approaches during this time.
Such an approach is relevant not only for the situation today, but also for the future as companies look to earn the trust of new generations of employees and multiple stakeholders.
The COVID-19 pandemic has tested the CFOs of private companies like never before, but their agility to adapt to continuous change, to “think big” and to be “inspirational leaders” have proved vital. A new EY survey highlights these and other characteristics of private company CFOs, including their embrace of technology and stewardship of long-term value. However, COVID-19 has also reinforced the need for “softer” skills based on empathy and emotional intelligence, and the survey suggests that private company CFOs need to focus on developing their people skills.