Survey Highlights Top Issues That Keep CFOs Up at Night
by Terri Eyden on
By Jason Bramwell
What are the top issues that give CFOs nights of restless sleep? Well, according to the first-ever CFO Pulse Survey from executive recruiting and search firm Korn/Ferry International, the two things finance executives worry most about are revenue growth and possessing the right talent to achieve organizational goals.
Two issues that are not keeping CFOs up at night are rising pressure to spend liquid cash on hand and cost management.
Eighty-six CFOs tracked in the KF1000 – a proprietary database of CFOs at the top 1,000 US companies by revenue that Korn/Ferry follows – were asked questions on a variety of topics, including talent development, succession planning, regulatory changes, and company growth, to determine the foremost issues facing CFOs today and to create a baseline of CFO sentiment in this post-recession era.
More than half (51.8 percent) of the CFOs surveyed said they worry about revenue growth, followed by having the right talent to achieve the organization's goals (47.1 percent). Staying on top of regulatory changes also is a concern for 37.6 percent of CFOs.
Joshua Wimberley, senior client partner and lead partner of the Financial Officers Center of Expertise for Korn/Ferry, told AccountingWEB there is certainly a premium on talent who understand the technical side of finance and accounting, but CFOs are also looking for professionals who have soft skills, such as leadership abilities and effective communication skills, in order to meet company goals.
"They need to have the ability to communicate the company's investment story to influence and persuade stakeholders, customers, and investors," he said. "That combination of technical expertise and communication and leadership skills is hard to find."
Additional Key Survey Results
Following are some other key findings of the first-ever CFO Pulse Survey from Korn/Ferry International:
- 80 percent of CFOs plan to spend liquid cash on hand on investment in operations and growth initiatives, further emphasizing the importance of operations to many companies' overall business strategies, as well as the CFO's involvement in the execution of those plans.
- 68 percent of CFOs expect the use of predictive analytics and big data tools to increase this year.
- 49 percent of CFOs believe that if they were to leave their company today, their successor would be an external hire.
- 96 percent of CFOs do not agree that the only way the United States can significantly increase the number of women serving on corporate boards is through a legislative mandate.
Issues that CFOs are not stressing as much about include achieving quarterly financial goals (24.7 percent) and managing enterprise risk (24.7 percent).
Also, 80 percent of CFOs surveyed feel that a global set of financial reporting standards will not be put in place within the next year.
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are collaborating to improve US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), as well as to eliminate or minimize the differences between them. The two standards-setting boards have a goal of developing a unified set of high-quality, international accounting standards that companies worldwide could use for both domestic and cross-border financial reporting.
"People see it more as a long-term issue than a short-term one," Wimberley said. "I just think the urgency around global reporting standards has lost some momentum."
There is a little more urgency among CFOs about the Affordable Care Act; 61.2 percent believe it will have either a little, some, or a major impact on their company's bottom line.
More Operational Responsibility
Three-fourths (75 percent) of CFOs surveyed are being asked to take on more operational responsibility. As a result, they are forced to work outside the balance sheet and dive deeper into day-to-day operations of their business – a significant challenge for traditional CFOs who prefer to strictly stick to the financials.
"More CEOs are looking at their CFOs to help drive operations. It's a huge thing all across companies to stay relevant," Wimberley said. "The best CFOs are constantly improving their organizations and thinking of innovative ways to deliver results – whether it's in planning and analysis or ways to connect the numbers to the business."
AccountingWEB Readers – Join the Discussion:
- What do you think are the top financial and operational issues that are keeping CFOs up at night?
- Do you think the Affordable Care Act will impact your company's bottom line?
Please share your thoughts in the comments section below.