Chief Financial Officers' roles in the US, Europe and Asia have expanded dramatically over the last decade, increasing conflict between varying demands. This is posing significant implications for CFOs and their companies, according to the new study by Ernst & Young, What's next for the CFO? Where ambition meets reality. In a rapidly changing environment, driven by increasingly global markets, global competition, financial regulation and the outward movement of capital from east to west, these roles are evolving and CFOs in the Middle East will also find themselves at a turning point. “If CFOs want to concentrate on their strategic roles they need to streamline their scorekeeper and custodian roles, focus more on integrating financial and non-financial information, and build talented teams to share the workload. Based on the strategic objectives of the company and the nature of the regional markets, the CFO has to take the lead in defining his role,” said Omar Bitar, managing partner of advisory services at Ernst & Young Middle East. The survey showed that 20 percent of respondents attributed the expansion of their role to globalization. Ninety seven percent of respondents acknowledge that CFO roles have grown broader, but nearly a third believe that they do not have enough understanding of the wider issues their businesses face. Thirty five percent felt that CFOs should dedicate their time to working as strategic business partners to the CEO, whereas only 26 percent felt that this is what they do. “We have witnessed Middle Eastern economies evolve over the past few years, surpassing all expectations. Change is an inevitable component of the CFO's world. As the region matures and ascends in a globalized market, CFOs are being asked to play bigger roles as business partners. They are expected to follow in their predecessor's footsteps and become the natural successor to the CEO, in addition to performing their original roles,” added Omar. The accounting profession is rapidly approaching a crossroads, revealed the survey. “CFOs must make some important decisions - streamlining the finance function so that they can free up scarce resources and time and move into the role of business partner. They need to balance ambition with people capabilities and corporate goals,” he added. Survey findings also showed that: q CFOs collaborate effectively with functions such as tax, treasury and IT, but less well with research and development and marketing, sales and distribution. q Eighty eight percent stated that ‘being good with numbers' is not enough, affirming that more than just the traditional skills of the finance function are required for their success. q Thirty one percent agree that the CFO does not have enough understanding of the wider issues the business faces. q Sixty five percent of surveyed CFOs agree that they need to focus on being strategic partners to the board, 57 percent think they should focus on risk management and 20 percent believe they should be doing general accounting. q Thirty eight percent of respondents believe that the quality of training and development programs provided for the finance function is poor. Where ambition meets reality, the Economist Intelligence Unit interviewed 251 C-suite and board-level executives. The respondents included a significant number of CFOs drawn equally from the US, Europe and Asia. All respondents worked for businesses with a turnover of more than $1 billion which represented a wide range of industries. It highlights issues and challenges facing CFOs in these markets, as well as identifies the typical roles carried by CFOs. According to the study, the four roles carried out by CFOs include the Scorekeeper (monitors and reports the company's results, works with external regulators, and monitors tax and transfer pricing); the Commentator (provides reports to the board and audit committees, provides information for investors, and reports on treasury results), the Custodian (develops and improves financial control systems and manages financial and business risks), and the Business Partner (participates in strategy development, leads M&A activity, and provides leading indicators for business performance). __
