How CFOs can make more impact in the boardroom and beyond

It’s no secret that in recent years the role of the chief financial officer (CFO) has undergone somewhat of a metamorphosis. Today’s CFOs are increasingly expected to take on the broader role of financial strategist and data storyteller.

While leading strategy has its own unique challenge, it also presents new opportunities. CFOs have become central to fostering better company collaboration and influencing key business decisions.

McKinsey hit the nail on the head when it described the CFO as “best positioned to provide the most relevant and up-to-date facts and figures, which can help boards find clarity amid chaos.”

Achieving said clarity requires effective communication with many business stakeholders and complete visibility of operational data.

What does this look like in practice and how can CFOs use data to support conversations with the board and beyond?

Focus on Financial Storytelling

CEOs need their CFOs to be a voice of reason in the business but it’s also no longer enough to simply pull facts and figures.

A bigger picture approach is needed to proactively identify both issues and opportunities.

Let’s use investment opportunities as an example. A CFO’s role is to form judgements and measure execution risk.

Smart CFOs will use data to perform accurate cost/risk/benefit analyses and then support their position - be it an approval or objection - during conversations with the CEO.

Automating data collection and analysis as much as possible will support this, freeing up the CFO’s time to focus on that all important narrative.

Storytelling is arguably more salient when addressing the rest of the board - which is likely made up of different skill sets and backgrounds.

The CFO should tailor the financial narrative to consider the audience's financial literacy and preferred communication style.

Using data visualisation and collaboration tools to shift the focus from reporting on numbers to telling stories about key metrics is vital here.

What’s more, actively creating moments outside of the boardroom to explore members’ priorities and the business intelligence they need can help build a more effective financial story in the long run.

It also helps neutralise, or at least make visible, biases that may impact both C-level and line-of-business outlooks.

Engage with Department Heads

Smart CFOs will go beyond their inner circle and build relationships across departments to gain an even richer understanding of a company’s health, reaching beyond just financial data.

It may seem obvious to say but having this level of visibility not only enables CFOs to identify areas of cost savings and revenue streams but is mutually beneficial for these business functions too.

Finance leaders should be asking department heads how they can best support their business unit and provide up-to-date information on areas of the business which may impact them - that is, project performance, inventories, cash flow, investment status or resource allocation.

Presenting this information in a consumable way will enable department heads to draw insight and make relevant and impactful changes to their own operations.

Prioritise Investor Communication

As with internal stakeholders, CFOs also need to bring investors along on the journey and accurately present the company’s strategy and performance - including revenue, expenses, and profitability – in a concise and compelling manner.

Revenue, for example, is only half the story and investors need to understand future growth. Having those answers - in addition to the ability to respond to ad hoc questions in a timely manner - is crucial to the success of the CFO.

Embrace Integrated and Automated Finance Processes

Finance leaders using numerous disconnected systems create more work for themselves, and their teams, and introduce multiple points of failure trying to consolidate data and derive insights.

CFOs wrangling data from a patchwork of systems will find it time-consuming and challenging to share relevant information with the rest of the organisation and investors, and often spend more time looking in the rear-view mirror instead of driving the business forward.

To become a strong storyteller, expert collaborator, and savvy investor communicator requires a robust all-in-one business system, with real-time data and automation at its core.

With AI and machine learning technology embedded in an integrated system, CFOs can increase the speed and accuracy of financial insights, refine their communication skills, and make more impact in the boardroom and beyond.

By Scott Wiltshire, vice president and general manager ANZ, Oracle NetSuite