By Marshall Díaz*
Chief financial officers, or commonly known as Chief Financial Officer (CFO), play an essential role in managing the financial health of organizations.. Your job involves allocating resources effectively and providing strategic guidance to the executive team. and, in addition, they are tasked with managing risks, ensuring compliance with regulations and maintaining the financial integrity of the company. In short, CFOs are key players in driving business performance and creating value for companies.
Historically, the CFO’s role focused on reporting, accounting and regulatory compliance. This involved managing the company’s financial statements, deep regulatory knowledge and providing guidance to the executive team. Additionally, CFOs were responsible for mitigating the company’s economic risks and ensuring efficient allocation of resources.
However, current demands have led to a significant expansion of the CFO’s role. Today, they are expected to be strategic partners of the CEO and other senior management leaders., offering a forward-looking approach and guidance on business performance, growth opportunities and risk management. They must also excel as effective communicators and collaborators, working closely with other departments to drive innovation and digital transformation.
This change in business expectations for CFO performance has caused them to face three paradoxes in a world that demands effective and efficient solutions:
1. Immediate results and value creation
The first lies in the constant tension between the creation of long-term value and the need to meet the demands for immediate results. Achieving a middle point between these two priorities becomes an essential factor. The key lies in the ability to promote long-term strategies that at the same time translate into immediate achievements.
2. Innovate and manage risks
The second pillar focuses on risk management and innovation, which often seem to be at opposite ends within the business world. However, for CFOs there is a need to embrace calculated risks and seize opportunities in order to carry out bold and innovative transformations, without jeopardizing financial stability. To achieve this, it is essential to maintain a balanced approach and an open mind towards change.
3. Transformation and adaptability
Finally, the third pillar is the transformation in the role of the CFO, which demands a reevaluation of traditional financial competencies. These leaders find it necessary to expand their repertoire of skills beyond their scope in order to address the challenges of today’s business world and, therefore, adaptability becomes a fundamental element to achieve success in a business environment. constantly changing.
These conditions, while they may seem contradictory at first, can be reconciled by adjusting your focus on each dimension. For example, CFOs can focus on the intersection between people and technology, prioritize cultural transformation, digitalization, advanced use of data analytics and fostering the next generation of CFOs. Additionally, a high-performing finance function is essential to address these tensions and excel in your role.
CFOs must balance and resolve a strategic crossroads, where the intersection between people and technology, cultural transformation, digitalization and the focus on the next generation of financial leaders are crucial. To address these challenges, a high-performance finance function becomes a fundamental pillar. Ultimately, we can expect that CFOs’ ability to adapt, innovate, and lead will make a difference in the long-term success of their organizations and their path to the top of senior management.
*Marshall Diaz is Deputy Lead Partner of Accounting and Financial Advisory, EY Latin America
Editor’s note: This text belongs to our Opinion section and reflects only the author’s view, not necessarily the point of view of High Level.
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