With a wide variety of duties & responsibilities, ranging from financial planning and analysis to investment management, the function of a CFO has changed over time to become that of a strategic partner and advisor to the CEO. In simple words, the CFO's responsibilities in the majority of businesses in India, today, involves - monitoring cash flow, budgeting the company's finances, identifying its financial strengths and weaknesses, and making recommendations for corrective action.
However, though, as the business world evolves, so are these duties and responsibilities.
Here are some insights into developments that's going to have an affect on the manner in which Chief Financial Officers (CFOs) will be/ are expected to perform in future:
(a) Embracing Digital Transformation: CFOs in India are significant contributors in advancing digital transformation within organizations. They are expected to use technology to improve data analytics skills, expedite financial procedures, and give decision-makers - an access to real-time information.
(b) Increased Focus on Risk Management: With the growing complexity of business operations and evolving regulatory frameworks, CFOs are expected to place 'greater emphasis' on risk management. They are responsible for identifying and mitigating financial risks, ensuring compliance with regulations, and implementing robust internal controls.
(c) Strategic Business Partnership: From their traditional role as mere number crunchers, CFOs are becoming strategic partners and advisor to the CEO and other business leaders. They provide strategic guidance, financial forecasting, and scenario analysis to support business growth and expansion.
(d) Sustainability and ESG Reporting: Environmental, Social, and Governance (ESG) factors are gaining prominence in the business world. CFOs are expected to incorporate sustainability considerations into financial planning and reporting. This include social impact initiatives, and diversity and inclusion metrics.
(e) Data Privacy and Cybersecurity: As data privacy concerns and cybersecurity threats increase, CFOs are expected to prioritize data protection and establish robust cybersecurity measures. They play a critical role in ensuring the security of financial information and safeguarding against potential breaches.
(f) Artificial Intelligence and Automation: The adoption of artificial intelligence (AI) and automation technologies will likely continue to grow. CFOs are expected to leverage these technologies to optimize financial operations, improve efficiency, and reduce costs. This may involve implementing AI-powered forecasting models, automated financial reporting systems, or robotic process automation (RPA) solutions.
(g) Changing Regulatory Landscape: CFOs are expected to stay updated with evolving regulatory frameworks in India and adapt their financial strategies accordingly. This includes complying with changes in tax laws, accounting standards, and reporting requirements.
(h) Globalization and International Expansion: With Indian companies expanding their presence globally, CFOs are required to navigate international markets, currencies, and regulatory environments. They play a crucial role in managing cross-border transactions, assessing foreign exchange risks, and ensuring compliance with international financial regulations.
It's important to note that CFOs will need to remain adaptable, continuously upskill themselves, and embrace change to meet the challenges of tomorrow.