Today’s CFO in PH: a ‘CEO in disguise’, study says

THE STUDY posed a number of new challenges, including the need for business schools to update their curriculum to hone new skillsets.

Today’s chief financial officers (CFOs) are no longer just scorekeepers or number crunchers—they have also become strategists and catalysts, steering company direction and driving innovation.

This was one of the major findings of a CFO study undertaken by the Ateneo Graduate School of Business (AGSB).

The study was presented at the 44th World Congress of the International Association of Financial Executives Institutes (IAFEI) held Oct. 16 at the Shangri-la Hotel in Makati City. The CFO study was conducted from 2013 to early 2014, in collaboration with Finex Research and Development Foundation.

The results of the AGSB study inspired Dutch financial giant ING Bank and the Financial Executives Institute of the Philippines (FINEX), the premier organization of financial executives in the country, to enhance the selection criteria for the ING Finex CFO of the Year 2014 award.

Selection process

The improved selection process has made it a tougher job for this year’s panel of judges, led by Philippine National Bank chairperson and former Department of Finance undersecretary Flor Tarriela, to choose this year’s CFO awardee, who will be named on Nov. 19.

Since it started in 2007, the search has been paying tribute to the country’s topnotch financial executives.

“Companies are demanding a lot from their top finance executives now, and we don’t see this getting any easier, particularly with the current level of volatility and business uncertainty. To be a good CFO now means you have to be a game-changer,” said Consuelo Garcia, country manager of ING Bank.

Dr. Eliseo Aurellado, AGSB head of faculty and team leader of the CFO study, said the findings reflected a movement of the CFO towards the strategist and catalyst roles.

The study showed that 29 percent and 27 percent of the 33 respondents from 19 industries rated “strategist” and “catalyst,” respectively, as the most important roles of the CFO, compared to 25 percent who rated “steward” and 18.8 percent as “operator.”

There was no significant difference in the time spent among the four roles, but the respondents desire to spend 60 percent of their time as strategists and catalysts.

Thus, the CFO is no longer merely preserving and controlling company assets and running financial operations, but also increasingly shaping the direction and performance of the company, as well as instilling a better approach and mindset for greater performance, Dr. Aurellado explained.

New findings

“What the findings show is that the CFO nowadays is actually the CEO in disguise. They’re waiting in the wings,” said Dr. Aurellado, who defined the two roles as complementary.

Ayala Land CFO Jaime Ysmael, awarded the ING Finex CFO of the Year 2011, echoed the study’s findings.

In the largest property developer in the Philippines, he handles IT management, procurement, investor relations, corporate governance, and streamlining of activities, such as coming up with shared service centers.

“It is the natural progression of things (for a CFO to become CEO), depending on whether or not he wants to take on that role and his appetite for more work. But the skillsets have become pretty much the same,” Ysmael said.

The study posed a number of new challenges, including the need for business schools to update their curriculum to hone new skillsets.

CEOs also need to to recognize CFOs as their key partner in strategy formulation and objective-setting.

Similar trends

Dr. Aurellado said the study’s findings also reflected similar trends and results—albeit with some cultural differences— with CFO surveys conducted in other parts of the world.

“The CFO will really have to evolve. At the end of the day, he just might find himself in the shoes of the CEO. Is he ready for that?” he added.