Nearly 90% of nonfinance members of the C-suite believe the finance function's importance has grown in the past two years, and finance leaders themselves are spending more time collaborating with those outside of finance.
However, those other executives would like finance leadership to communicate better with employees and stakeholders.
That's according to a new survey by Oracle NetSuite, which polled CFOs as well as nonfinance executives about a number of topics, including role change and proficiency, inflation concerns, and revenue and profit projections. In some areas, CFOs' ratings of themselves were starkly different from the view of other executives, finance managers, and nonfinance managers.
The survey polled small and midsize company leadership in four categories: CFOs, nonfinance executives (other members of the C-suite), finance managers, and nonfinance managers. The annual revenues of most companies in the survey ranged from $25 million to $250 million.
CFOs and others in the C-suite agree on finance chiefs' proficiency in understanding the business; both groups rate that proficiency at 72 on a 0-to-100 scale. CFOs got higher marks from their C-suite peers on financing.
But on communication, CFOs thought more highly of themselves than others did. Their rating on the 0-to-100 scale for communicating with employees and stakeholders was 73; other executives gave finance leaders a rating of 59. That was the sharpest difference of opinion on finance leaders.
And on the skills that they've improved upon over the past three years, some disparities also exist. For example, 47% of CFOs list data analysis as a top area of improvement; 35% of nonfinance executives cite data analysis as a top-three area of improvement for CFOs. And just 25% of nonfinance executives said CFOs have improved in the past three years in driving new initiatives with partners or communicating with employees or stakeholders.
Where CFOs are spending time
Two-thirds of CFOs said they spent significant time on data analysis, financial planning and analysis (FP&A), and scenario planning, followed by meeting with other executives (57%). According to the survey data, CFOs in 2019 spent far less time in collaboration efforts than they do now. In 2022 responses, 51% spend significant time meeting with line-of-business managers, compared with 30% in 2020, and 42% spend significant time meeting with investors, creditors, or board members, compared with 18% in 2020.
Other survey numbers of note:
- 73% of finance executives expect their company's profit to be higher in 2022 than it was in 2021.
- CFOs are more interested in cutting or containing costs as a way to mitigate inflation than those in other roles are.
- The reported hours worked by CFOs in 2022 is lower than what it was in fall 2020, the last time the Oracle NetSuite survey focused on CFO behaviors.
- More CFOs (51%) said they enjoy developing scenario plans and dashboards for other executives than, for instance, reviewing month-end close accuracy. That's a task that 36% said they have delegated.
— To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.