A new report by IMA^® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants)  finds that the COVID-19 pandemic is accelerating the shifting of the CFO role.

“The CFO of the Future” report, with data from global surveys and virtual roundtable discussions, shows that the CFO role is continuing to evolve with additional responsibilities and that the global pandemic has brought these changes on faster than expected. In the Middle East, data from the report suggests that the role of the CFO is already being redefined, with the next generation of CFOs in the region expected to come from a finance business partner or controller background.

To evaluate the extent of this evolution, IMA and ACCA developed six hypotheses for participants to consider for their organizations’ CFO roles:

• The CFO will become predominantly focused on stakeholder and investor management rather than safeguarding and reporting
• The CFO will have a leading responsibility for business strategy formulation, validation, and execution
• The focus of the role is shifting from principally historic-based cost control to growth optimization
• The role will encompass measurement of all aspects of the strategic objectives of the organizations
• The CFO will provide the greatest value to the organization through forward insight rather than retrospective reporting
• CFOs will increasingly have the CEO role as the next progression in their career development

“The events of the past few months have changed several finance and accounting fundamentals and will continue to do so, especially as it relates to the CFO role,” said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. “Our research concluded that CFOs are no longer viewed solely as finance leaders. They are being looked to for governance and risk management, business change, business resilience, and technology advancement.”

The survey respondents, 1,152 ACCA and IMA members, as well as global roundtable participants that included CFOs and CEOs, saw most of the hypotheses already enacted. Globally, respondents most strongly agreed with the hypothesis that CFOs will play an increasingly important role in strategy execution. The least supported hypothesis was the career progression of the CFO towards a CEO role; however, most felt that this trend would increase.

In the Middle East, six in 10 CFOs are either already focused predominantly on stakeholder and investor management rather than safeguarding and reporting or are planning and expecting for this transition to occur. More than three quarters of the region’s CFOs believe that they currently have, or will soon have, a key role in business strategy formulation, validation and execution with accountability and responsibility towards respective performance.

There is also a definitive shift from CFOs focusing on principally and historically-based cost control to growth optimization, with four in 10 stating this is already the case, and an additional fifth of respondents stating that this transition is either being implemented or expected to occur.

Middle East CFOs believe that their role will be redefined to encompass all aspects of entities’ strategic objectives, such as those indicated by the six capitals of integrated reporting. While only a small percentage of Middle East respondents stated that this is currently their role, four in 10 stated that this transition is currently being planned, while a fifth expect that it will happen in the next three to five years.

A third of CFOs in the region believe that they currently have the role of “chief performance officer,” providing the greatest value to their entities through forward insight, rather than retrospective reporting. Six in 10 stated that they are either currently planning to move towards this role, or that they expect the transition to occur in the next three to five years.

Contrary to the rest of the world, Middle East CFOs have lower expectations for becoming CEOs. Just over half anticipate that this may be the case in the nextfive years, while more than a quarter stated that it is unlikely to occur. Around the world, at least 20% of study respondents stated that they are currently progressing into the role of CEO.

The next generation of CFOs in the Middle East will predominantly have finance business partner experience, or will come from a controller background with a focus on internal reporting. Operational experience in the employer’s industry, and Chief Accountant experience – especially with a focus on internal reporting – will also be key roles performed by future CFOs.

A CFO-specific qualification is especially in demand in the Middle East according to 65% of respondents, more so than in any other region.

Hanadi Khalife, Senior Director of MEA and India operations at IMA, said: “Global events have set the world into an unexpected state of transition in which the role of CFOs is proving to be more important than ever before. As the results of the study demonstrate, the role of the CFO in the region is changing into creating value and contributing to business growth on a more holistic scale, as opposed to focusing on the financial aspect alone. The need for determining new sources of value is growing tremendously amongst entities of all sizes, across all sectors.”

“Our CFOs of today are strategic and forward-looking, and no longer limited by their organization’s financial agenda,” said Clive Webb, ACCA head of business management. “They have broad agendas and are contributing to their organizations in ways that we identified back in 2012, even during this global pandemic. Our CFOs are more well-rounded than ever and will continue to enhance their skillsets as many take on more responsibility and possibly become CEOs in the future.”

The full “The CFO of the Future” report is available here.