How Finance Leaders can Drive Business Growth

CFOs have a lot on their plate. But finance directors are more than glorified bean counters or senior accountants - they are integral c-suite leaders, who have to be as cognizant of wider business trends, operational metrics, and financial industry movements as they are of internal spending, investment or tax commitments.

The person who steps into the CFO role has to be financially diligent, forthright in their knowledge and confident in their ability to craft improved business decisions while maintaining fiduciary oversight on all financial dealings within an enterprise.

The Modern CFO

Optimisation, capital expenditure, investments, tax… CFOs are still very much in the driving seat for these essential financial operations. However, in the immediate post-COVID era, finance directors will be increasingly relied upon to provide the groundwork for future growth. That means CFOs have to work within new frameworks of financial control and expectations that meet our new market and business realities. “It is unlikely that any finance function will wholly go back to its former ways of working…Changes for individual financial functions depend on their starting point, their journey through the pandemic and where the wider organisation is in terms of its position post-pandemic”. This quote, from Simon Hunt, COO of PwC’s UK audit business, is telling - financial recovery will not be uniform, nor easy. Each enterprise has had to traverse the challenges of COVID-19 in its own unique way, and each enterprise will have to set new financial and business goals in the aftermath. So how exactly will CFOs drive business growth in 2022 and beyond, as the pandemic abates and new horizons dawn?

Solidify C-suite leadership teams and drive collaboration

CFOs have a unique position within senior governance and leadership teams and should be central figures in uniting business operations behind multi-departmental goals. After all, company finances are the scaffolding on which operations are built and maintained, so financial managers need to be front and center in all operational decision making. They should provide ample diligence and oversight on not only company spending, but overall company direction.

The first stage in innovation

CFOs should lead company innovation. In a Forbes piece titled Why The CFO Could Lead Company Innovation,

• “Shareholders generally trust the CFO to have their best interests at heart.
• CFOs can drive innovation across the organisation.
• CFOs understand the budgetary landscape, what funding is available and what projects are imperative to pursue in order for the business to prosper into the future.
• CFOs…understand cross-departmental synergies.
• CFOs are in a unique position to understand trends, analyse the competitive environment and see a bird’s eye view of the business.
• CFOs (are) intimately familiar with the running of all departments, their performance and…the risks and opportunities.
• CFO can correlate these returns with macroeconomic trends, such as urbanisation or a change in interest rates, and suggest innovation”.

In short, the CFO is the perfect person to lead on innovation due to their unique position overseeing every facet of business improvement, analysis and, critically, cost.

The Commercial CFO

The best modern financial leaders are commercially driven. In a Toptal piece titled The Role and Responsibilities of the Modern CFO – A Function in Transition, commerciality was framed through the lens of astute risk management, “They must understand risk through a commercial as well as a financial lens. Therefore, they need to manage risk as the business executes on its strategies and initiatives as well as maintain a strong internal controls environment and financial reporting processes”.

Risk Management and Leadership in the Digital Age

CFOs provide guidance, strategy and leadership of risk management and mitigation as part of the day-to-day. In the modern world, no company is free of vulnerabilities: as digital presences proliferate, financial, data and business risks balloon. And, as “cybersecurity risks spill over into financial risks”, CFOs are being relied on to step up to help shore up risk mitigation. In fact, many already are. Consider the salient points from this Deloitte survey:

• 48% of CFOs provide direct reporting for audits and compliance.
• 35% stated that their teams report to them directly for all risk management matters.
• 55% of the CFOs in the survey stated that they participate in enterprise risk management.

Risk management has to also take stock of non-financial risks and how they impact the bottom line such as recruitment costs; governance and regulatory changes; the rise of sustainable investment and green initiatives and so on.

The bottom line

CFOs are more than a bulwark against fraud or poor investment decisions - they are integral strategic leaders, whose input into operational direction in light of increased risk is vital. They are, as the above facts highlight, essential to enterprise growth, and, due to their unique position straddling options, investment and risk management, should be taking a frontline position as drivers of growth.