This Is Your Co-Pilot Speaking: The Changing Role of Chief Financial Officers (2024)

And why we’re about so much more than finance and accounting

Hear the words “chief financial officer”, and most non-finance people instinctively think of men (or maybe women) in sober suits who eat spreadsheets for breakfast and don’t open their mouths without mentioning complex financial metrics and regulatory requirements.

No wonder. After all, CFOs like myself, and the corporate finance teams we lead, are responsible for tracking, controlling and processing the money that goes in, out and around an organization—the outgoings to suppliers, staff and tax authorities, the bills payable by customers. We’re the ones who keep tabs on budgeting and audit financial filings. Without us, any company would quickly run into trouble with the investment community, stock-market regulators, vendors, customers, and its own staff.

But the world has changed, and so has the role of CFOs and the skill sets we need to bring to the job.

From support function to critical glue and strategic co-pilot

In addition to the age-old challenge of making stuff and getting paid for it, companies now face an array of new issues. Accelerating technological change. The climate crisis. Supply chain disruptions. Cybercrime. The workplace changes wrought by the Covid pandemic… And most recently, soaring inflation and a global energy crisis.

All this means companies need to think much more holistically about their business strategies and ways of operating than they did 20 or 30 years ago.

This is where the finance function comes in.

For one thing, our wider scope, aside from tracking money, also spans governance—ensuring adherence to accounting principles and financial regulatory regimes, and legal, taxation and other requirements. We ultimately sign off on accounts, earnings reports, budgets, and spending plans, and so act as the ultimate group-wide governance control point and overseer, often in partnership with key corporate functions like IT, legal, HR, and compliance.

For another, the finance function touches every part of an organization: payroll, supply chain payments and receivables, IT spending, and investment and acquisition decisions. This means we can become a unifying glue, driving the standardization of processes and digital tools across business lines and jurisdictions, and propelling business-critical transformation, streamlining and simplification initiatives.

This is more important than it may sound. After all, when large corporates fail, it’s generally not because their business strategy is faulty. Often, it’s because they’ve become disjointed and unwieldy—perhaps because acquisitions have assembled multiple teams with different existing practices, outlooks and tools.

And so at Schneider Electric, we’re currently making big efforts to simplify how we work, streamline our product offerings, and ensure that our money goes only into technologies and innovations that deliver scalable growth and value for our customers and shareholders.

Shaping strategy, from commercial rationale to sustainability impact

Environmental, social and governance (ESG) performance is a hugely important part of this. And for CFOs who sign off on investment plans, resource allocation, mergers and acquisitions, it needs to be absolutely front of mind.

This may sound counterintuitive, as ESG is largely about non-financial metrics. However, no company can afford not to meet the ESG expectations of customers, investors, regulators, and employees, or fail to position itself for the long-term challenges—and opportunities—posed by climate change and social inequality. So ultimately, the actions one takes to optimize the value of the company, particularly over the medium and long term, are tied to the right ESG strategy.

Investing in sustainability commitments aimed at sourcing energy from renewable sources, achieving greater gender balance, and making a positive long-term impact on the planet and society, for example, is not simply an act of charity or philanthropy.

It’s about looking strategically to drive value for a company and its stakeholders over the medium and long term. It’s about future-proofing your company, being more competitive, more innovative, and more resilient. It’s just as business-critical as profit-and-loss financials and must go hand-in-hand with them.

The changing role of CFO from number-cruncher to multi-talent

What does this mean about the skill sets we now need to bring to the job?

Sure, CFOs and finance folks need to be adept at spreadsheets or, more and more, software replacing spreadsheets. We need to be able to do accounting and math and understand regulations around mergers and acquisitions or bond issuances.

But we also need to understand and have a voice in diverse issues, from IT system upgrades and digital transformation programs to product development and corporate sustainability commitments. And that, in turn, means we need to think strategically, partner with the business, and manage and collaborate across multiple teams and departments. Most importantly, we need to think end-to-end to drive value across the organization, no matter its structure.

So, next time you think about the changing role of CFOs, think of us as more than sober-suited number-crunchers.

Think of us as enablers, not obstacles to organizational change and company transformation.

And think of us not as just a support function, but as co-pilots of the corporate plane, shaping and steering strategy and group operations alongside the CEO.

Hilary Maxson joined Schneider Electric in 2017 and became the company’s Chief Financial Officer in April 2020. She was named “Best CFO” at the Institutional Investor’s 2022 Developed Europe Executive Team Awards in September 2022. Learn more about Hilary’s experience in her recent interview with CFO Brew