The Role of CFOs in Contingency and Crisis Management

As leaders of their respective finance and accounting (F&A) departments, Chief Financial Officers (CFOs) are looked up to by F&A professionals during this global crisis.  

The role of CFOs in contingency and crisis management is indispensable to maintain business operations smoothly.  

The Importance of Having a Contingency plan and a Crisis Management Plan 

Here are the key points on the CFOs’ role in steering their departments during a global crisis: 

Risk management and mitigation leadership 

No one understands a company’s financial position better than the CFO. Chief Financial Officers have the knowledge and expertise in assessing a crisis’s impact on sales, supply, production, and other areas of the business.  

This places them in the best position to lead the risk management and mitigation efforts of businesses, thereby preparing the company for potential threats. 

Related: Tips for a More Effective Financial Analysis and Forecasting Process 

Boosting financial planning and analysis 

Crisis management and contingency planning require making a lot of decisions, often quickly. Hence, it is important for executives or decision makers to have the right numbers ready in real time. 

Additionally, boosting your financial planning and analysis tools, analytics dashboards, and other relevant F&A software can help in making sure that CFOs and other C-Level executives make the right decisions with the right numbers in place. 

Preparing for the worst-case scenario 

Along with risk management and mitigation, CFOs are suited to ensure that liquid assets are available whenever possible. Having a 13-week cash flow forecast as a standard report reference can help CFOs prepare cost-saving strategies, allocate resources where it is needed the most, and develop a robust backup plan. 

 Read: 7 Cost-Saving Strategies CFOs Can Implement to Improve Profitability 

Creating a cost-savings plan and budget realignment 

Global crisis has changed the way businesses operate. This includes reevaluating company expenses and aligning the budget to support remote team members effectively, ensuring the tools and resources needed are available while potentially saving on items like office space and equipment.  

Also, availing the government assistance programs for businesses can also be part of the action plan to extend the company's budget amidst a global crisis such as to what happened during the COVID-19 pandemic. 

Read Next: The Role of a Chief Financial Officer in Good Cash Flow Management 

Keeping the people first 

Placing paramount importance on the safety and welfare of employees and other stakeholders should be the top priority.  

Doing so is not just a humane act but also a practical course of action. These people are the ones who can help their businesses keep afloat, especially during times of crisis.  

Like any other C-Level executives, CFOs must be able to determine how stakeholders, including employees, are affected by a crisis and what are the steps a company must take in order to protect them. 

Chief Financial Officers have a significant role to play in strategic management, ensuring that companies can handle black swan scenarios and other crises well.  

With the help of the right tools, CFOs will be able to recommend to the management what steps they can take to protect their business and stakeholders, thereby crafting an appropriate business continuity plan.  

This plan should include measures to minimize damage and ensure disaster recovery, highlighting the importance of a solid crisis management team in recovery planning. 

Are you in need of a right-hand to help you manage your CFO roles? 

D&V Philippines is a reputable finance and accounting (F&A) solutions firm that offers a wide range of CFO support services.  You may talk directly to our expert today and let us lend you a helping hand to your task. 

You may also download our “Premium CFO Solutions” whitepaper today and learn how our F&A experts can help you in your tasks, enhancing your ability to navigate through potential crises with an effective action plan. 

This article was first published on 03 January 2020 and updated on 18 June 2024. Edited by: Angelica Garcia