An article posted n the EY Global webpage says chief financial officers (CFOs) face complex and contradictory demands as they strive to drive long-term value and find short-term cost efficiencies while reinventing the finance function.

To glean the state of this complex function, earlier this year, EY conducted a survey of 1,000 CFOs and senior finance leaders worldwide. It released the results of its research at the end of April 2024. “Of the respondents, 69% are CFOs, including 18% who are Group CFOs, with the remainder holding divisional and regional CFO roles. The remaining 31% of respondents were drawn from finance director and heads of finance roles. Respondents were from 21 countries and 13 industry segments, with 70% representing organizations with revenues of between US$1b and US$5b per year and 30% with revenues exceeding US$5b per year.”

The research discovered that there are three fundamental paradoxes within the CFO role:

1. Creating long-term value while facing pressure to cut priority investments.
2. Managing risk while driving value through bolder and more innovative change within finance.
3. Succeeding as a strategic finance leader and achieving career ambitions when traditional finance skill sets do not provide the breadth of experience required for the role.

To help address these paradoxes and excel in their role, the 2023 Global EY DNA of the CFO Report (pdf) says that “CFOs should broaden their range of skills and capabilities outside of finance and develop a high-performing finance function. The report also reveals that CFOs and senior finance leaders driving bold and innovative change agendas in finance can unlock greater value today and are poised to deliver more in the future.” According to the research:

• Currently, 16% of finance leaders surveyed describe their finance function as delivering best-in-class performance, with only 14% of finance leaders surveyed planning to pursue a bold transformation agenda in the next three years. This suggests a reluctance to embrace more innovative change agendas that require an appetite for experimentation and new ways of working.
• The 14% of finance leaders pursuing a bold agenda are 1.4 times more likely to believe they have an above-average or best-in-class finance function today (73% vs. 52%) and 1.7 times more likely to believe they will reach best-in-class status after transformation (47% vs. 27%). The finance leaders who are driving change prioritize culture, technology and analytics, and the development of the next generation of leaders.

This research explores the three paradoxes faced by finance leaders and strategies to help CFOs deliver greater impact for their businesses, the finance function and in their own careers. It concludes that, to benefit the wider business, “CFOs should articulate a strategy for long-term value while setting achievable targets and implementing effective performance management. Transforming the finance function will likely require a cultural shift, fostering new mindsets and behaviors within the team. Additionally, engaging more closely with external stakeholders can provide CFOs with valuable insights into market pressures. By prioritizing these areas, CFOs can navigate the challenges and lead their organizations to even higher performance.

Find more insights at https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/campaigns/cfo-agenda/documents/ey-dna-of-the-cfo-2023-report-low-res.pdf.