Defining the Modern CFO: Responsibilities and Strategic Impact

The role of a Chief Financial Officer (CFO) has significantly evolved over the past few decades. Previously, CFOs were primarily responsible for managing a company’s financial operations, ensuring accurate financial reporting, and overseeing budgeting and auditing processes.¹ However, the modern CFO’s role has expanded far beyond these foundational duties to include strategic leadership, digital transformation and risk management.

The strategic impact of a CFO has grown as their role has expanded. They are now central to driving business transformation and creating long-term value. This is why more start-ups and medium-sized companies are hiring CFOs.¹ By leveraging data analytics and strategic insights, these finance leaders help companies navigate complex market dynamics. Their involvement in risk management and sustainability initiatives ensures that companies are resilient and aligned with stakeholder expectations.

This blog post will explore the role of CFOs today and their impact on an organization. As the head of finance, their responsibilities have grown over time as has the influence they play in their company’s success.

Historical Perspective of CFO Responsibility

The original function of the CFO was a supportive role that primarily centered around financial reporting. In this capacity, corporate treasurers were responsible for ensuring accurate financial reporting, preparing financial statements and overseeing compliance with accounting standards and regulations. This role also included budgeting and forecasting as well as treasury and cash management. Finance directors implemented and monitored controls to prevent fraud and financial mismanagement, as well as identified and mitigated financial risks.²

As the business landscape evolved into the 21st century, the role of the CFO expanded beyond these traditional responsibilities. Modern heads of finance have become strategic leaders involved in shaping the company’s strategic direction. The rise of digital transformation has further expanded the financial leader’s role. Leveraging data and analytics, chief financial managers provide actionable insights that inform strategic decisions and improve financial performance.³

CFO Roles and Responsibilities in 2024

Finance executives are integral in guiding companies through complex financial landscapes, driving innovation and growth, managing diverse risks, fostering sustainability, ensuring global regulatory compliance and shaping the overall strategic direction of their organizations.

Financial Stewardship

In 2024, the role of the Chief Financial Officer continues to be grounded in financial stewardship: managing the books, minimizing risk and creating an efficient and effective finance operation. CFOs are responsible for maintaining the financial health and integrity of their organizations. Their main focus is profitability. With this focus, finance leaders must identify inefficiencies and create strategies that will uncover growth opportunities for their company. These strategies will help minimize risk, allowing the company to thrive and become profitable.⁴

Strategic Leadership

The role of the CFO in 2024 is multifaceted. Financial strategists are now expected to help shape and execute the company’s long-term strategy. They need to be forward-thinking. They collaborate with the CEO and other senior executives to develop and implement plans that drive growth. Finance executives provide context into what the numbers mean, leading to strategic decisions that are backed by robust financial analysis and projections. They play a pivotal role in aligning financial strategies with overall business objectives.⁵

Executive Management Innovation and Technology Integration

Finance directors lead the adoption and implementation of digital technologies that enhance financial operations and decision-making processes. This includes utilizing advanced analytics, artificial intelligence (AI) and robotic process automation (RPA) to streamline financial reporting, improve accuracy and increase efficiency. A recent poll found that 60% of CFOs use cloud-based technology for streamlined financial planning and reporting.⁴

In essence, chief financial managers ensure that technology investments align with strategic goals and deliver value.⁶

Risk Management and Compliance

Risk management and compliance are critical areas of focus for CFOs. They conduct regular risk assessments to identify potential threats and develop strategies to mitigate these risks.

Compliance with international and local regulations is extremely important, requiring CFOs to navigate complex regulatory environments and ensure adherence to all relevant laws and standards. Additionally, the emphasis on environmental, social and governance (ESG) factors means that finance chiefs must integrate these considerations into risk management and reporting processes, ensuring that the organization meets its sustainability and ethical commitments.⁷

Preparing for a Career as a Modern Chief Financial Officer

Preparing for a career as a modern finance director involves a blend of rigorous education, relevant certifications, diverse professional experiences and continual skill development. Aspiring corporate treasurers can position themselves for success in this dynamic and strategic role.

Required Education and Certification

Aspiring professionals need a strong educational foundation and relevant certifications. One can start their career journey by obtaining a bachelor’s degree in accounting, finance, business administration or a related field. Many successful CFOs further their education with a master’s in business administration (MBA) or a master’s degree in finance or accountancy. These advanced degrees offer deeper insights into strategic management, financial analysis and leadership skills essential for high-level executive roles.

Gaining certifications along the way is vital to this career path. Here are some certifications that lend well to the career of a finance executive:¹

• Certified Public Accountant (CPA): This is often considered a must-have credential for CFOs, demonstrating expertise in accounting and adherence to high professional standards
• Chartered Financial Analyst (CFA): The CFA credential is highly valued for its rigorous focus on investment management and financial analysis
• Certified Management Accountant (CMA): This certification is beneficial for those focusing on management accounting and financial strategy

Essential Skills

In addition to education, heads of finance must possess a combination of technical expertise and soft skills in order to be successful. Here are examples of essential skills CFOs possess:⁸

• Financial expertise: A deep understanding of financial statements, budgeting, forecasting and financial analysis is crucial for financial controllers, enabling them to interpret complex financial data and deliver actionable insights
• Strategic thinking: Modern financial executives act as strategic partners within the organization, developing and implementing long-term strategies that align with company goals and drive growth
• Leadership and management: Effective leadership is essential as CFOs lead finance teams, manage cross-functional collaborations and foster a culture of performance and accountability
• Technological proficiency: Familiarity with the latest financial software, data analytics and digital tools is necessary
• Risk management: Proficiency in identifying, assessing, and mitigating financial and operational risks is critical
• Communication and interpersonal skills: Strong communication skills are essential for presenting complex financial information in a clear and concise manner

Emotional Intelligence

In today's corporate environment, emotional intelligence (EI) has emerged as a vital skill for CFOs.

Beyond traditional financial expertise, modern finance chiefs are expected to demonstrate high EI to effectively manage their finance teams, foster positive work cultures and navigate complex interpersonal dynamics.

CFOs with high emotional intelligence can maintain composure under pressure, leading to sound decision-making and strategic insights that strengthen the company’s financial position. By understanding and regulating their own emotions, they can provide stability and clear direction for their teams, ensuring efficient financial reporting and the effective management of financial records.

Moreover, EI allows finance leaders to empathize with team members and stakeholders, enhancing collaboration and communication. This is particularly important when working with senior leaders and the chief executive officer (CEO) to develop and implement a coherent business strategy. A CFO's ability to convey complex financial reports and insights with clarity and empathy can significantly influence strategic decisions.

High EI also plays a crucial role in managing relationships with regulatory entities such as the Securities and Exchange Commission (SEC). By fostering a transparent and collaborative approach, CFOs can ensure compliance while maintaining trust and credibility.

In addition to these strategic benefits, emotional intelligence helps chief financial officers lead their finance departments more effectively. When they create a supportive and motivating environment, these leaders can enhance the performance of the finance team, contributing to a healthy cash flow and overall company’s financial strengths. The best CFOs, often among the highest-paid finance chiefs, combine technical skills with strong EI, demonstrating leadership skills that drive both team and organizational success.

To stay competitive, aspiring CFOs should focus on developing their emotional intelligence alongside their technical abilities. This combination of skills is essential for navigating the complexities of modern financial management and achieving senior-level leadership in today’s dynamic business landscape.

Career Advancement for Chief Financial Officers

Having the right skills and educational background can set you up for success as a chief financial manager. However, most aspiring CFOs will have similar backgrounds, so what will set you apart from other candidates? Diverse roles, leadership experience and networking are ways you can stand out and grow your career.⁹

• Gain diverse experience: Start with roles in accounting, auditing or financial analysis to build a solid foundation. Next, seek opportunities in different areas of finance to broaden your expertise, such as corporate finance, investment banking or financial planning and analysis. Gaining this experience not only allows you to expand your knowledge but also helps identify your strengths and weaknesses.
• Seek leadership roles: Take on leadership roles within your organization to develop management skills. Leading projects, teams or departments can provide valuable experience in strategic decision-making and team management.
• Network: Build a strong professional network by joining industry associations, attending conferences and participating in professional forums. Networking with other finance professionals can provide career opportunities, mentorship and industry insights.

Aim for the C-Suite With DePaul’s Online Master of Science in Accountancy

The role of CFO continues to evolve, and more companies are hiring CFOs for their financial expertise and strategic leadership skills.

Now is the ideal time to advance your career with an Online Master of Science in Accountancy from DePaul University.

To learn more about this program, explore the DePaul Online Master of Science in Accountancy program page, delve into the curriculum, explore career opportunities and visit the DePaul Online Master of Science in Accountancy blog.