CFOs with a formal accounting background are becoming a rarer breed. Today, leadership and strategic chops trump CPA creds at many companies. That’s because the role of CFO is experiencing a major disruption, new research shows, with finance chiefs being stretched between more operational responsibilities and a more strategic business role. Savvy team building and a firm footing in data analytics are increasingly essential to not just assume the post—but thrive in it.
4 need-to-know headlines
1. CFOs embrace data analytics to keep pace with evolving role
Data tsunamis, new regulations, more demanding stakeholders, and volatile risk are all competing for attention from finance leaders—and changing the very role of the CFO, according to a new report by Ernst & Young. CFOs today find themselves stretched increasingly thin, taking on more operational responsibilities beyond finance—even as they assume more strategic roles. “It’s become a job that may be too big for any one individual to do well, given all the responsibilities and the incredible contrast between the day-to-day tactical controllership functions, and the very long-term, strategic, executive functions,” an EY advisory leader said. “It’s now more important than ever for the CFO not just to worry about their role, but also the team that they surround themselves with.” And the tools, it seems. The survey of nearly 800 finance leaders showed that delivery of data and analytics will be crucial for tomorrow’s finance leaders. More than half of respondents said they need to deepen their understanding of smart technologies and sophisticated data analytics. (via AccountingToday.com and CFO.com)
2. Chinese acquisition targets get creative amid greater risks
Chinese takeovers are on the rise—but for many American companies, these would-be acquisitions are also fraught. Failed financing, bungled bids, or the U.S. government’s concerns over national security have put the brakes on several takeovers. That’s made some U.S. companies cautious—and others more creative. Escrow accounts and letters of credit, as well as reverse break-up fees that are double the usual rates, are now becoming common in Chinese takeovers. Upfront cash—in an account outside of China—seems to be soothing some of the anxiety around these higher-risk deals. (via WSJ.com [log-in required])
3. A clash of opinion at G-7 Summit
How do you goose economic growth when the global economy is flagging? Finance chiefs from the Group of Seven advanced economies gathered in Japan to debate that question. But the road to stability seemed marked by differing opinions. Canada and Japan supported plans for more fiscal stimulus, while Germany cautioned against a one-size-fits-all approach. “I think German fiscal policy is rather successful,” he said. (via Bloomberg)
4. Investors prod companies to disclose more people metrics
Companies can live or die by how well they manage their human capital, say investors who want more access to that data. So far, companies have largely resisted the push to disclose stats around employee turnover, absentee rates, training programs, and employee engagement scores. But recently, two institutional investor groups made inroads with major retailers. What that success could mean for other industries remains to be seen, but analysts expect the momentum toward more human capital transparency will only increase. (via CFO.com)
Sound bite of the week
“What we found, as a general matter so far, is a lot of preparedness, a lot of awareness but also their policies and procedures are not tailored to their particular risks.”—Mary Jo White, chair of the U.S. Securities and Exchange Commission, speaking to how under-prepared Wall Street is to digital attacks. The SEC has found cyber security to be the biggest risk facing the financial system. (via Reuters.com)
The stat: $6.6 trillion
The total amount of debt on the books at more than 2,000 nonfinancial companies analyzed by research firm S&P Global Ratings. That means corporate debt rose roughly 15% last year—a staggering stat largely overlooked because corporate cash balances also grew, masking the trend. “The punchline is that the liquidity profile is not as good as it seems,” the study’s co-author said. (via WSJ.com [log-in required])
4 Top Stories + 1 Key Statistic + 1 Industry Quote = The CFO 411
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