(Expansion) – The role of CFOs has changed remarkably in the last two years. Between the challenges of the health emergency, disruptions in supply chains and global uncertainty, CFOs took the reins and had to provide stability in the face of constantly changing scenarios.
Yet the best finance leaders have long possessed a range of skills that go beyond balance sheet management. CFOs are frequently asked to provide strategic recommendations to the CEO and to work closely with IT and HR leaders.
But in today’s hybrid world, modern CFOs are also expected to be knowledgeable about technical issues like cybersecurity, digitization, and financial process automation. And a growing trend shaping the role of the CFO is the rise of environmental, social and corporate governance (ESG) as a key business priority.
Whereas in the past efforts to support ESG goals were perceived as having little relevance to business outcomes, business leaders now recognize that ESG initiatives have a direct impact on resilience and financial performance, which leads us directly to the field of action of the CFO.
With the ability to drive resource allocation and accountability, finance leaders are empowered to lead the process of defining ESG goals and measuring company progress toward long-term stability, efficiency, and profitability. term.
By creating sustainable internal processes and promoting transparent reporting, the modern CFO paves the way for a resilient future for employees, stakeholders and shareholders alike.
The numbers show that sustainability is good for business: The Commission on Business and Sustainable Development reported that organizations that commit to sustainability will have generated at least $12 trillion in savings and new revenue by 2030 in the areas of energy, cities, food and health.
The skills of the modern CFO
Many of the skill sets that are and will be most important to driving ESG results can be found in finance teams, such as monitoring and reporting, risk management, and cost optimization.
CFOs require emotional intelligence and excellent communication skills to conceptualize and defend their ESG strategy, gaining buy-in from all departments through data-driven arguments.
Although not all CFOs currently have ESG within their responsibilities, credentials and subject matter experience could soon become an essential part of a CFO’s required skill set.
With a variety of ESG frameworks to choose from, CFOs will need to decide which metrics to measure and how. The creation of a specific working group can help finance managers to identify tailored actions for companies to achieve the greatest positive impact, be it through a more efficient use of energy and resources, the creation of social credibility or the guarantee of transparency in corporate governance.
The CFO will need to work closely with other leaders to foster cross-team collaboration. The best candidates must demonstrate their ability to translate data into effective action plans and convince others to join the project. The willingness to commit to this business field is key.
Editor’s note : Patricio Garretón is a senior partner at Page Executive. Follow him on . The opinions published in this column belong exclusively to the author.
