How can bold CFOs reframe their role to optimize performance?

EY CFO Imperative Romania Study 2024

The role of the Chief Financial Officer (CFO) in Romania has experienced a radical transformation in recent years. The traditional equation of prudence and austerity management has been swapped for a bolder strategy; one fueled by innovation, integration, and unimaginable feats of growth steered by CFOs beginning to place more emphasis on the holistic development of their team’s skills.      

The EY CFO Imperative 2024 survey provides an interesting glimpse into the multi-faceted role of the CFO, seeking to comprehend his/her personal and professional transformation in a rapidly evolving business landscape. The role of the CFO has now moved beyond traditional financial stewardship and now involves leading strategic initiatives all while showcasing a balance of both hard and soft skills. Prompted to select key aspects standing out as being vital to their success, the CFOs in Romania firstly pointed to the ability to assess multiple diverse strategies and perspectives in order to uncover cost savings and growth opportunities. Second in ranking came the adoption of a growth mindset with a focus on devoting time for personal career development.

Building upon the previously identified necessary skills for succeeding as a CFO, the strategic approach in financial leadership is seen to be strongly tied to four primary skills: strategy vision, risk management, talent and budget management. These skills are centered around strategic decision-making for sculpting the company’s future, resilience against risks, and effective utilization of financial knowledge. According to the Finance Directors in Romania, risk management, tackling a wide range of risks like credit, liquidity, solvency, and more, is a topmost priority in banking.

Yet another common thread weaving through these conversations is the concurrent importance of collaboration and a focus on talent identification and development within teams. As custodians of an organization’s financial health, CFOs understand that a harmonious and skilled workforce is integral to sustainable success.

CFOs hold a pivotal skill in spotting talent early in their careers, with 88% of CFOs in Romania expressing a higher level of confidence in this area compared to their global counterpart (58%). The confidence to adjust careers amongst CFOs is also considerably higher in Romania at 83%, next to 58% globally, suggesting that CFOs in Romania feel more adaptable and ready to make career changes as needed. Lastly, more than half the executives in Romania (68%) feel optimistic about establishing succession plans with a defined process for it in place, another figure than outpaces the global average.      

Moving on from not only identifying talent but also utilizing it effectively, this study reveals two critical areas in today’s business setting – driving cultural shifts and reshaping talent for dominance in data. An overwhelming majority of CFOs (100%) highlighted the need for embracing an adaptable mindset to lead change. 98% voiced the necessity of supporting innovative ideas to cultivate a digital finance culture, with 96% supporting linking reward strategies with this paradigm shift. To complement this, 84% advocated for internal mobility to spur development and agility within finance teams and 82% emphasized a reevaluation of hiring approaches and development schemes to stay abreast of evolving demands.

The interviews also divulged that CFOs in Romania are evolving in accordance with the global shift towards more sustainable business practices. CFOs in Romania seem to understand that the integration of Environmental, Social, and Governance (ESG) factors into financial practices can enhance company long-term performance.

However, while globally 51% of CFOs express firm agreement with the strategy of prioritizing long-term investments in ESG programs, those in Romania trail slightly at 34%. This tendency is mirrored, with a larger proportion of global CFOs (46%) recognizing the importance of ESG and sustainability for the long run compared to CFOs in Romania. The gap widens once more when discussing the drive for cost efficiency and short-term earnings targets during bold changes – 44% of global CFOs strongly echo this sentiment, dwarfing the low 12% agreement from CFOs in Romania. These results are indicative of potential room for growth for sustainability practices in the Romanian market.

Lastly, the importance of adopting cutting-edge financial tools and technologies was brought to the fore. Intelligent business tools, machine learning and digital projects that allow automation and efficiency in their departments are no longer an option but a compass for navigating today’s ever-changing business environment.

Globally and locally, “Technology Transformation” tops the chart with 37% and 75% respectively, indicating the universal emphasis on technology in the future of finance. “Advanced Data Analytics” is the second priority globally (27%), which is even more pronounced in Romania with 62% agreement, underlining the importance placed on data insights. With its ability to provide predictive capabilities, identify trends, and equip decision-makers with real-time insights, it plays a pivotal role in informed, strategic decision-making.

Technologically advanced tools exhibit significant potential in transforming the substantive nature of enterprise operations. An increasing dependency on Artificial Intelligence (AI) is observed for improving and simplifying finance-related tasks, despite present-day tools offering limited features. However, the power of AI and other advanced tools inevitably lies in their ability to automate routine tasks and foster a deeply analytical finance function. Envisioning future uses, merging AI functionalities with BI tools, designed to learn and generate reports independently, can be expected to be truly ground-breaking.