Why CFOs’ roles are shifting

CFOs continue to take on responsibilities that fall outside the traditional finance role, but the particulars of those new responsibilities are changing.

An annual survey by The CFO Alliance shows that 72% of finance chiefs expect their role to expand in 2013. That’s on par with last year’s number, when 71% expected a growing role. However, the specific priorities are also changing, said The CFO Alliance’s Nick Araco.

“We spent the majority of 2012 talking about doing the most with the least,” Araco said of round-table discussions throughout the US. “So you can imagine that the CFO was spending a significant amount of time with areas around technology, human capital, and sales and marketing and attempting to work with the various function leaders to measure and track performance and ROI for the investments being made in those assets.”

Araco, the chief executive of the group, which has more than 4,000 members, said CFOs in 2012 were more focused on maintaining than planning. “In 2012, it was, ‘How do we get the greatest ROI around the investment that we’ve made,’ not, ‘How do we increase the investment?’ ” he said. “How do we garner the most with what we’ve already done?”

So far in 2013, the tenor of discussions has changed. With economic optimism on the rise, especially in the US, and with many companies sitting on big cash reserves, CFOs are taking on a more strategic role in order to deploy that cash.

“It’s very much focused on corporate growth, on strategy and M&A,” Araco said. “It’s about creating value and making investments that will accelerate performance in terms of top and bottom line.”

CFOs still consider the retention of talent as the top internal concern in the next year, according to an annual survey.

Other highlights of the results:

• The top internal concerns for CFOs, after talent, are health-care reform and innovation.
• 57% of respondents expect to spend more on wages and employee benefits in 2013, up from 52% who expected to spend more on those items in 2012.
• Nearly one-fourth (24.2%) of respondents listed health-care reform as having the greatest impact on their budgeting and strategic plan for 2013.
• The top external concerns are, in order: competition; consumer confidence and demand; and availability of credit and interest rates.

The survey used responses of 425 senior finance leaders. Two-thirds are from private companies, and 84% have annual revenues of less than $250 million.

Related CGMA Magazine content

“Talent Retention Tops CFOs’ Staffing Concerns”: Retaining valuable staff members is CFOs’ top staffing concern, according to a recent Robert Half survey. Read about how companies can create an environment where employees want to stay after the difficult times created by the financial crisis led to disillusionment and lowered morale.

“CFOs’ Optimism on the Rise”: CFOs in the United States have greater expectations for economic growth in the next 12 months compared with the sentiment of counterparts in Italy and France. A quarterly survey from early 2013 shows that US CFOs project higher net earnings and revenue. Their companies also are more likely to add staff in the next year.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.