CFOs today must be responsible for the day-to-day accounting, treasury, finance, risk management and internal-control functions. But not only that: they have to assist with company strategy, obtaining resources and delivering its strategic objectives sustainably, according to a discussion paper published last week by the International Federation of Accountants (IFAC).
What’s more, this isn’t merely a “check-the-box” list of responsibilities. The report notes that “these different and distinct facets of the CFO’s role need to be undertaken with integrity and without compromising one another.”
Balancing the responsibilities of stewardship and business partnership is one of five principles IFAC outlines for CFOs in its discussion paper, The Role and Expectations of a CFO. Others include effective organizational leadership and being a key member of senior management; being an integrator and navigator for the organization; being an effective leader of the finance and accounting (F&A) functions; and bringing professional qualities to the role and the organization.
“Ultimately, CFOs need to go beyond delivering numbers and information to delivering insights into performance and the factors affecting it,” according to the report. To do so, CFOs must have a good understanding of the external and internal business environment, the report said, including the challenges faced by various organizational functions as well as by the organization as a whole.
It adds that “effective business partnering involves managing collaborative relationships and potential conflicts, and being a trusted and proactive partner in decision making.” Business stewardship responsibilities can be likened “to the accelerator and brakes on a car, which are both needed and not in conflict with one another.”
Aspiring CFOs need those skills as well. As Roger Tabor, chair of IFAC’s Professional Accountants in Business (PAIB) Committee, noted in a statement, “…it is more important than ever for the profession to develop outstanding professionals who are well equipped to work in business and government, and to take on finance leadership roles.”
The IFAC report outlined several actions that professional accountants should take to prepare for such roles in the future. They include identifying and addressing any significant gaps between the skills organizations expect of their CFOs and finance leaders and the qualification and professional development of accountants; engaging with employers and business communities; and ensuring that the qualification and training of professional accountants incorporates broader professional and interpersonal abilities and skills.
IFAC is requesting comments on its discussion paper by February 10, 2014.