Role of CFO becoming more complex: Industry watchers

Role of CFO becoming more complex: Industry watchers

Amid a changing business environment, the role of a chief financial officer has become more complex. Industry watchers say that CFOs are increasingly expected to be more involved in strategy and planning, going beyond traditional functions of governance and compliance.

SINGAPORE: Amid a changing business environment, the role of a chief financial officer has become more complex. Mr JK Low has been a chief financial officer for about 12 years and is currently in that post for Viking Offshore and Marine for the last five years.

In recent months, declining oil prices and currency volatility have kept him busy as he tries to manage rising domestic costs and productivity demands. He said an increasingly complex business environment had made his role as CFO more challenging.

"You need to navigate beyond what you do traditionally - making sure books are well kept and making sure governance and controls are in place - and take advantage of this to help the business and leadership team to move forward," added Mr Low.

"The CFO is in a very interesting position where he gets to see the overall financials of the company, he knows what are the resource capacity available to the company, and they need to make use of this and provide this information to the senior leadership team."

According to a recent study by KPMG in a recent survey on Asia Pacific CEOs, executives in the post are increasingly expected to be more involved in strategic planning - especially since they have a deeper understanding of financial opportunities and risks.

Mr Martyn Vans Wensveen, global leader of financial management at KPMG in Singapore, said: "More and more CFOs are becoming business partners and it is in a way challenging the business plans and viability of the investments the business is making in the future ... It is about being that strategic thinker who has an overview of the business and can help the CEO with making good decisions for example which businesses to invest in, which markets to go into and which technology platforms they should invest in."

With financial and regulatory requirements becoming increasingly complex, firms are expected to be accountable to even more stakeholders - including internal management, regulators, investors and even the public. Industry watchers said that CFOs are assuming more responsibilities in ensuring timely and consistent communication with each respective group.

Mr Harold Woo, president of the Investor Relations Professionals Association (Singapore), said: "Our regime is one of comply or explain, so that puts a lot of onus on the CFO as the responsible person to make sure that corporate governance is carried out correctly and with the right disclosure and transparency ... The advocate of integrated reporting puts onus on connecting all the dots of how a company creates value for its stakeholders and how risks are mitigated."

Even as their roles expand, industry watchers said new technology can help CFOs better plan ahead. Greater availability of financial data can also help provide insights for future business opportunities.

- CNA/ac

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