Finance chiefs viewed as business partners
Chief financial officers (CFOs) are rising to the challenge of running businesses in a crisis. And, in so doing, they are entering a golden age.
A report by the Economist Intelligence Unit and CFO Research Services says that CFOs worldwide are enjoying significant shifts in status.
Commissioned by the Association of Chartered Certified Accountants (ACCA), the global body for professional accountants, 'Crisis and Finance: the CFO's new environment in China and Hong Kong' polled 256 finance and other executives in Hong Kong and the mainland as part of a survey of 714 senior executives worldwide.
Its findings suggest that CFOs are undergoing a transition spanning the past 10 to 15 years.
Tony Osude, the ACCA's head of professional development, said that CFOs, traditionally seen as 'bean counters' working in back offices, were now viewed as business partners. 'Many CFOs are working towards taking a strategic role,' he said.
The global economic crisis is serving as a catalyst.
The report said that chief financial officers' roles were seen as being far more important than they were a year ago. 'Lots of boards recognise that they need strong financial skills and information to make much better decisions,' Mr Osude said.
'CFOs are much more valued inside the organisation, their provenance is raised and they are getting greater support from the boardroom.'
Research shows that changes in the role of CFOs in Hong Kong and the mainland almost match those in the United States and Europe. 'Their contribution is perceived to be much more valuable,' Mr Osude said.
The economic uncertainty posed some problems. It made planning even six months ahead a challenge, he said.
There are delays in Hong Kong in non-essential investments and in essential strategic investments.
Another major difference is that organisations are experiencing significant changes from within. CFOs needed to be prepared to drive through change successfully, Mr Osude said. 'Fortunately, a lot of CFOs are used to change, but it is a challenge in getting the rest to go with you.'
Optimising cash, tightening up financial management processes and working with suppliers to obtain the best deals are procedures taking place worldwide.
'CFOs in Hong Kong are trying to manage this dilemma of cutting costs while not reducing the size of the business or the business footprint,' Mr Osude said.
Local businesses also stand out in that about 30 per cent are looking for merger and acquisition opportunities. 'The Chinese character that signifies both risk and opportunity sums up a lot of the reaction,' Mr Osude said.
The report indicated that CFOs are in the spotlight because of the economic downturn as much as the past decade's changes.
'CFOs have accelerated opportunities to make a difference,' Mr Osude said. 'They are better placed than anyone else to steer businesses through choppy waters.'