28 Jan 2020
The CFO role continues its evolution with a distinct Irish character
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As the role of CFOs continues to morph away from pure number-crunching, there are important differences in how this is playing out in Ireland.
The stereotypical image of reserved and risk-averse Chief Financial Officers in dark grey suits, with a background in the ‘big four’ accountancy companies, is rapidly fading.
Its replacement is less easily stereotyped, carrying more emphasis on diverse views, experience and profile.
KPMG’s 2015 global survey predicted the CFO would be the C-suite role to rise in importance. And that’s the way it’s turned out.
In our recent CFO guide, I joined the heads of Odgers Berndtson Global CFO Practice teams in profiling what the modern CFO role looks like. And where it’s headed.
Today’s Chief Financial Officer requires a complex blend of qualities, a far cry from the narrow financial specialist of the past.
Financial acumen and accounting competence are presumed, but today’s CFO must have the astute vision to look behind and beyond the numbers. This role has added importance in the C-suite, now expected to be the CEO’s strategic business partner, knowing the detail but also scanning the horizon—a tactical thought leader. Adding resilience, strong leadership, communication skills and digital acumen to the mix makes for a role with daunting responsibility, taking on more prominence than ever.
At least one-third of the FTSE is now chaired by former CFOs.
Local Irish perspective
The market for CFO movement in 2019 was significantly livelier in the UK than in Ireland, for a variety of reasons.
Irish CFO tenures tend to be longer. On average, it’s 12.5 years compared to 3.5 to 4 years in the UK.
Also, succession planning is not prevalent except in very large bodies. And, understandably, Brexit uncertainty has contracted expansion plans, leading to more internal replacements (versus new, external blood) than a more stable and optimistic economic outlook might have allowed.
Similar to the housing market over recent years, mid-tier positions have been more actively traded than top-tier, high-profile acquisitions.
Irish versus UK requirements
Whilst diverse backgrounds in CFO appointments is a growing trend, this is, once again, more so in the UK than here in Ireland. There, meritocracy now regularly wins over the ticking of traditional boxes.
Though accounting qualifications are still a must, fresh thinking and a diversity of experience, especially international, shows the initiative and preparedness top companies want. Also, MBAs are becoming more favoured than CPAs.
Irish companies are still slow to hire across sectors when filling the top finance role, safely sticking with risk-averse thinking.
A big shift we’ve seen this year is a strong move towards more diversity and inclusion. Now, broader action to redress former imbalance is common beyond blue-chip businesses and plcs.
Across Irish business and commerce, private and public, gender balance on shortlists is now reaching parity, a very welcome trend. And like the CFO role itself, it’s a story that’s still evolving as 2020 progresses.