Apart from supervising and reporting on a company's overall spending, roles of Chief Financial Officers (CFOs) have evolved over time, which calls for expanding their skills to become more of a partner to Chief Executive Officers (CEOs).
While you generally need a strong work ethic, problem solving skills and a degree in business, finance or economics to be a CFO, the expanded scope of your role calls for some extra skill sets.
CFO skills and competencies
Strategic Planning
To become a better partner to the CEO, you can help with formulating strategies for growing the business. This includes searching for new opportunities, innovating and improving your business model and establishing key performance metrics. The CFO’s knowledge in the company's financial standing is important in coming up with a better, data-driven strategic plan for your business.
Leadership
Traditionally, CFOs were in charge of the company's finance and accounting (F&A) department. But, with the scope of tasks expanding to strategic planning and risk management, you can expect to have to guide, manage and motivate the rest of the company's teams - from sales, marketing and customer service to human resources, IT and administration.
Related: In Pursuit of Success: CFO Roles in Business Growth
Decision Making
CFOs complement CEOs through a myriad of skills and competencies. In most cases, the two roles converge when it comes to making decisions for the company.
CFOs extract insights from financial reports and books; allowing them to identify the opportunities and limitations they can do with the resources available. From these, they report the consolidated data to the CEOs and land with a sound business decision that best supports the business’ growth.
Risk Management
As more and more small to medium enterprises (SMEs) go international, your CFO duties will include becoming a consultant on the sustainability of a business model and on the pros, cons and requirements of investing in or merging and partnering with companies from different parts of the world.
Aside from the acquisition, mitigating financial risks is an important scope of the role. Eliminating cash flow pitfalls gives you a guarantee you can move your operations along with enough working capital.
Public Speaking and Communication
CFOs today share the responsibility of appearing before the media, employees and investors. With a new emphasis on everyone being an active shareholder of a company - in stocks and in man-hours - a CFO needs to be able to communicate the company's financial strategies and performance whether at a live assembly, in podcasts or in blogs and newsletters.
The skills of a CFO will continue to expand as the rest of the F&A industry evolves along. Having these skills and the support of your finance and accounting team, you can become a more effective and innovative CFO, a better partner to your CEO, and a reliable leader in your organization
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This post was first published 20 July 2014 and edited 18 January 2021.
