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How will soft skills give CFOs a sharper edge?

Private company CFOs are change agents, stewards of long-term value and technology leaders, but need to improve their people skills.

In brief

  • “Adapting to continuous change” is seen as the most important personal and leadership quality possessed by successful private company CFOs.
  • The finance functions of private companies rate highly on technology, innovation, agility and culture, but are seen as too risk-averse and cost-conscious.
  • Top-performing CFOs need to focus on networking opportunities and building their people skills.

Dealing with the unexpected is an occupational hazard for chief finance officers (CFOs) of private companies, but they have been sorely tested during the past year as the priority has moved to responding to the unprecedented health and economic impacts of the COVID-19 pandemic.

Practical concerns – such as overseeing the health and safety of finance teams, supporting virtual working and communicating with stakeholders – have been balanced by financial management issues including maintaining liquidity, securing supply chains and managing fraud risks. With some countries having experienced a second wave of COVID-19 and continuing economic turbulence, uncertainty remains.

It is perhaps understandable then that having “the agility to adapt to continuous change” has been identified as the most important personal and leadership quality required for a private company CFO to succeed in the future.

More than 400 private company respondents to the 2020 EY DNA of the CFO survey, comprising CFOs, finance directors and heads of finance, were each asked to identify two preferred qualities needed by CFOs. Adapting to continuous change was the top response, identified by 62% as one of their two choices.

The second most important quality was “a willingness to experiment and take calculated risks,” which was selected by 54%. This, again, has resonance in the COVID-19 era, given that many companies have had to rethink their business models to survive the economic consequences of the pandemic.

The CFO: from cost gatekeeper to business partner

So, how do perceptions match reality? Respondents were also asked which two attributes were most commonly associated with CFOs in their organizations.

The top attribute associated with a private company CFO is a “big thinker and strategist” and the second is “an inspirational leader and strong communicator.” These results fit with the modern image of a CFO as a business partner to the CEO, fully involved in strategy and decision-making.

However, the more traditional image of the CFO – as the gatekeeper of the numbers – has not been completely superseded. Being “cost-focused and risk-averse” ranked equal fourth in the attributes associated with private company CFOs.

When asked to respond to the statement “Our finance team is seen by many people in the organization as too risk-averse and cost-conscious,” 73% of private company respondents agreed. Seventy-five percent also agreed that “traditional back-office behaviors and mindsets in finance are slowing the modernization of the function.”

The survey results highlight that private company CFOs have stronger relationships with IT and operations teams than they do with their marketing and HR colleagues. In fact, 55% reported that they had limited or no collaboration with the Chief Human Resources Officer and 46% had limited or no collaboration with the Chief Marketing Officer.

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. Eighty-two percent of private company respondents agreed with the statement that “to drive culture change, CFOs need to move beyond technical left-brain skills to develop competencies in people-oriented right-brain areas.”

The ability to inspire and motivate people is important at any time, but has increased significance during periods of uncertainty such as currently being experienced across the globe.

If these CFOs feel they need to improve their people skills, they should consider executive leadership courses and take advantage of networking and mentoring opportunities. “Soft” skills can be developed; you don’t necessarily have to be born with them.

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.

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.