Finding the next generation of CFOs

When we pre­dict the future of the C‑suite, the chief finan­cial offi­cer (CFO) looks set to be piv­otal. In this chop­py eco­nom­ic world with work­force and invest­ment pri­or­i­ties ever-chang­ing, their brief may even become more influ­en­tial, and more pow­er­ful, than that of the chief exec­u­tive.

But many believe not enough is being done to find and equip the best new tal­ent for this crit­i­cal board­room posi­tion. In a sur­vey for ACCA, the glob­al body for pro­fes­sion­al accoun­tants, 45 per cent of those ques­tioned believed insuf­fi­cient atten­tion was being paid to devel­op­ing the skillsets of next-gen­er­a­tion CFOs. 

Oth­ers ques­tion how impor­tant tra­di­tion­al account­ing should be when ele­ments, such as inno­va­tion and change, cyber­se­cu­ri­ty, envi­ron­men­tal, social and gov­er­nance issues, and cryp­tocur­ren­cy, may all have increas­ing impor­tance. The need to offer the whole busi­ness insight into gran­u­lar data could even push the CFO more into the sphere of a chief infor­ma­tion offi­cer.

So what skills should be nur­tured and how can the diver­si­ty of future can­di­dates be improved?

Izzy Dawood, CFO at glob­al online pay­ments com­pa­ny Paysafe, says: “If you ask many CFOs, very few start­ed their careers say­ing they want­ed to be a CFO. Instead, they focus on build­ing their skills, grow­ing their expe­ri­ence, seek­ing men­tor­ship and build­ing high-per­form­ing teams. That’s cer­tain­ly the mind­set you are look­ing to iden­ti­fy.  

“The next gen­er­a­tion will obvi­ous­ly need to be high­ly com­pe­tent in sev­er­al tech­ni­cal areas, not all, as well as three oth­er core areas: lead­ing teams, men­tal agili­ty, and the abil­i­ty to sim­pli­fy com­plex items and artic­u­late this infor­ma­tion to mul­ti­ple con­stituents with vary­ing com­pa­ny and finan­cial knowl­edge.”

Soft­er skills, such as com­mer­cial acu­men, com­mu­ni­ca­tion, prob­lem-solv­ing, nego­ti­at­ing and influ­enc­ing, would sup­port this, Dawood adds.

Ali­na Cio­can, finance oper­a­tions man­ag­er at Kani Pay­ments, agrees the CFO is no longer just a num­ber crunch­er. “They dri­ve busi­ness val­ues and risks, mon­ey-sav­ing ini­tia­tives, pro­cure­ments, exter­nal invest­ments and oth­er ele­ments that help a com­pa­ny look to the future and plan its next mar­ket moves. Because of this, CFOs often come from with­in the organ­i­sa­tion after mov­ing through the ranks; those who live and breathe the com­pa­ny,” she says.

Look outside the traditional sphere to boost CFO diversity

Exter­nal tal­ent acqui­si­tion is also impor­tant though and Cio­can sug­gests scout­ing beyond the UK’s finan­cial hubs as poten­tial can­di­dates could come from any­where. 

She adds: “As a way of fur­ther encour­ag­ing diver­si­ty, the finance indus­try needs an image rebrand to become more open and approach­able. If a busi­ness has­n’t already, it should begin pro­mot­ing its own diver­si­ty pro­gramme and work with net­works that sup­port women and BAME [black, Asian and minor­i­ty eth­nic] indi­vid­u­als in finance. It can then progress to direct men­tor­ship pro­grammes to sup­port indi­vid­ual devel­op­ment with­in the com­pa­ny. 

“This is a way to lift those who will strug­gle to find their foot­ing in the finance sec­tor before they even begin.”

Bernard Huger, CFO of secu­ri­ty plat­form OneL­o­gin, also believes there is no sin­gle track to becom­ing a CFO. He says: “The best can­di­dates are the peo­ple with some­thing to prove. They may not come from typ­i­cal back­grounds and may have been over­looked in the past. In fact, I think non-tra­di­tion­al back­grounds may yield can­di­dates who are bet­ter than, say, peo­ple on the CFO path with a tra­di­tion­al account­ing back­ground.”

Huger adds that CFOs will ulti­mate­ly be the “chief truth-tellers” in an organ­i­sa­tion. “They need to arm oth­ers with the facts and make sure con­ver­sa­tions and deci­sions are based on the facts. By own­ing the data and mak­ing it avail­able as appro­pri­ate through­out an organ­i­sa­tion, a CFO can ful­fil that role. This is a prob­lem that is increas­ing­ly impor­tant to solve,” he says.

Deb­bie Bowen-Heaton, part­ner at con­sul­tants Oliv­er Wight, believes future CFO can­di­dates will need a strong back­bone. “The pan­dem­ic has shone a spot­light on the impor­tance of the CFO’s role in com­bat­ing the CEO’s state of denial. They need to be even more of a num­ber scep­tic and yet be brave enough to chal­lenge their CEO and board when they need to. CFOs will be ever­more valu­able to the CEO as a mir­ror to high­light and show up errors the CEO makes.”

A new way for the future CFO to learn

Sarah Dan­zl, skills expert at Degreed, pre­dicts the future finance leader will learn and train dif­fer­ent­ly too, using new­er meth­ods such as video con­tent and TED Talks, blogs and arti­cles, online cours­es, pod­casts and peer-led learn­ing. 

Degreed’s State of Skills 2021 report makes inter­est­ing read­ing, find­ing advanced data analy­sis and math­e­mat­ics, and quan­ti­ta­tive and sta­tis­ti­cal analy­sis were low­er down the list of top-ten skills most in demand for finance lead­ers than advanced com­mu­ni­ca­tion and nego­ti­a­tion, and entre­pre­neur­ship and ini­tia­tive-tak­ing.

Dan­zl says a greater focus on skills will reduce bias in the recruit­ment or pro­mo­tion process. “For a finance lead­er­ship posi­tion, some­one who can show they have the major­i­ty of the most in-demand skills will have more of an advan­tage over some­one with less of a skill pro­file. This approach strips away oth­er fac­tors, such as edu­ca­tion­al back­ground, gen­der iden­ti­ty, race and sex­u­al ori­en­ta­tion, and so can help to boost diver­si­ty.”

But Dan Wells, founder of Grow­C­FO, points to one issue for future pro­gres­sion, acknowl­edg­ing many in the next gen­er­a­tion of CFOs may feel uncom­fort­able dis­cussing career aspi­ra­tions with their boss, “mak­ing them less pre­pared for any oppor­tu­ni­ties that arise”. 

How­ev­er, Wells believes the increas­ing use of tech­nol­o­gy plat­forms for num­bers-based facets of a CFO’s role means the nature of the job is chang­ing huge­ly, argu­ing this is a good thing for widen­ing the pool. He says: “Grow­C­FO analy­sis shows the non-finan­cial ele­ment of the CFO’s role will increase from 60 per cent to 95 per cent dur­ing the next 20 years, in par­tic­u­lar towards dri­ving strat­e­gy and change. The role has become a lot more col­lab­o­ra­tive by nature and should appeal to a wider range of can­di­dates.”

Meet the future CFOs

Three finalists from the Future CFO of the Year Award category at the TARGETjobs 2020 Undergraduate of the Year Awards share their insights

Mary Letey, study­ing math­e­mat­ics at the Uni­ver­si­ty of Cam­bridge

The pan­dem­ic has shown that rigid­i­ty and over­ly struc­tured cor­po­rate ideals won’t hold up long term. Chief finan­cial offi­cers will have the chal­lenge and respon­si­bil­i­ty of moti­vat­ing future employ­ees in a way that’s agile and strate­gi­cal­ly adapt­able as the world becomes more com­plex, with­out sac­ri­fic­ing well­be­ing. My gen­er­a­tion is also more acute­ly aware of social issues such as rep­re­sen­ta­tion gaps and inequal­i­ty, and I believe we have a great capac­i­ty for dri­ving mean­ing­ful change in these areas.

Vaish­nav Rajku­mar, study­ing Euro­pean pol­i­tics at King’s Col­lege Lon­don

What attracts me to become a CFO isn’t just the finan­cial aspect. A major plat­form of mine dur­ing the award appli­ca­tion was the renewed focus on envi­ron­men­tal­ly aware actions. CFOs don’t nec­es­sar­i­ly need to have a finance degree, sim­ply a gen­uine inter­est, backed by exten­sive back­ground read­ing. No one is inher­ent­ly inel­i­gi­ble to become a CFO. The word “finan­cial” in the title often dis­cour­ages many from aspir­ing to this role, bring­ing to mind intim­i­dat­ing spread­sheets and data-pro­cess­ing.

Chwas Ros­tam, study­ing busi­ness man­age­ment at the Uni­ver­si­ty of Sur­rey

To encour­age a more diverse selec­tion of can­di­dates, I rec­om­mend estab­lish­ing part­ner­ships with char­i­ties such as Social Mobil­i­ty Foun­da­tion and SEO Lon­don, and spe­cial­ist recruiters. This will cre­ate new oppor­tu­ni­ties for under-rep­re­sent­ed groups, giv­ing boards a more diverse pool of can­di­dates to assess when select­ing the organ­i­sa­tion’s next CFO. Men­tor­ing and spon­sor­ship pro­grammes will empow­er under-rep­re­sent­ed groups to fur­ther pur­sue their ambi­tions as they learn from the invalu­able insights of their supe­ri­ors.