5 March 2010 | Paul Snell
Finance directors increasingly need the support of their staff and colleagues as the role of the CFO becomes more strategic.
According to a panel of finance chiefs at the Economist CFO Summit in London yesterday, CFOs need to have more confidence than ever in the people who report to them. As they face additional demands as a result of the economic climate, and as they take on responsibility for other functions, they need the heads of those functions to be experts in their fields.
“It becomes critical you have great people in place for all the functions you are responsible for. Within supply chain, IT, you’ve got to be sure you’ve got the right people,” said Ian Dyson, group finance and operations director at Marks & Spencer. "My role becomes much more mentoring and high-level guidance.”
Chris Lucas, group finance director at Barclays, agreed. He said: “It’s all to do with the quality of people you have around you and getting that right is probably the most important decision that the CFO can make.”
The CFOs highlighted the change in their role, positioning themselves as the “trusted support to the CEO”, advising on strategic planning and risk analysis. But finance directors still need to learn how to cope with this. “There needs to be a recognition that the skills set that is needed is broader than it was 10 years ago,” said Mark Otty, EMEIA managing partner at Ernst & Young.
“We are in the middle of a survey of CFOs, and of the 300 that have responded so far two-thirds say their greatest development needs are around influencing and communication. I’m not sure that many organisations are doing a great job of ensuring the CFO team actually have the opportunities to develop that broad skill set.”
Relations between finance and procurement leaders have often been characterised by misunderstanding and a lack of trust, with a study last year suggesting only 17 per cent believe CPOs deserve a place at their company’s top table.
But finance too must make changes to the way they interact with other areas of the business, including how they explain their role. “As a profession we tend to be a bit snooty about it – ‘these are the technical high-level things you lot don’t need to know about, it’s all a bit too difficult’,” Dyson said. “That’s entirely the wrong approach. These people do need to know about it and the more you embrace that the more people understand.”