Compliance, controls and cost management are bulk of the role: EY survey
TORONTO, June 29, 2016 /CNW/ - Globally, the role of the CFO has evolved to include more operational and strategic responsibilities, according to EY's DNA of the CFO report. This change is happening in Canada, too, but at a much slower pace.
EY's survey finds fewer than half of Canadian CFOs see their role evolving to include more strategic work (47%) versus 64% globally.
"The time Canadian CFOs' spend on traditional finance functions like compliance, controls and costs management limits their ability to make a strategic contribution to their business," says Terry McKay, Performance Improvement Partner and Finance Lead Canada at EY. "In fact, our survey finds only one quarter of Canadian CFOs spend more time developing and defining company strategy, compared to 45% globally."
McKay shares his insights about the report in a short video – you can watch it here.
Meeting future needs of the finance function
New corporate performance management technologies are enabling much more sophisticated stress testing of business plans and associated risk weightings. However, some 69% of CFOs say their current finance function doesn't have the right mix of skills and capabilities.
"Over half of global and Canadian CFOs don't feel comfortable delegating responsibilities of strategic priorities because of a lack of necessary skills on their teams," says McKay. "But they're looking to change that."
Sixty-nine per cent of Canadian CFOs surveyed say they want to improve their strategic risk management skills and experience, while 56% also place a priority on sophisticated planning and forecasting capabilities for the finance function.
Risk management a focus
Management of reputational, regulatory and cyber risks is becoming an increasing focus for Canadian CFOs, too, with about two-thirds (63% vs. 57% globally) saying that this will be a critical financial capability for meeting the future demands of their organization.
McKay says this is not a surprise considering cost and risk rank first and second respectively, in future organizational priorities for Canadian CFOs. Globally, CFOs prioritized growth.
More data than ever before
Technology upgrades and the move to cloud-based systems means that finance functions have access to more data than ever before. However, it's unclear how well equipped many Canadian finance teams are to interpret that data and draw out insights that can inform strategic decisions.
"Forty-four percent of Canadian CFOs know they need to develop an understanding of digital, smart technologies and sophisticated data analytics," says McKay. "However, only 38% of our Canadian survey respondents were increasing time spent providing analysis and insight to support their business and senior management. That's a gap CFOs need to address."
"We're seeing the CFO role evolve quickly and it's a good idea for Canadian CFOs to mark their place in that evolution," adds McKay. "One important way for CFOs to meet their organizations' future strategic priorities is through building their skills and capabilities — and those of their teams. Another is finding the right resources to embrace risk, data and technology demands to improve results."
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SOURCE EY (Ernst & Young)