A constant evolution
The role of the Chief Executive Officer and Financial Officer (DAF) has been evolving since the late 2000s. Digitalisation has profoundly changed the way in which we view the function and its role within the company.
Faced with the regulatory milestone (IFRS 16, GDPR etc.), digital transformation and investor pressure, the DAF can no longer just be the company’s cost killer. It must therefore accompany change at all levels. These changes change the environment beyond its comfort zone. It becomes part of strategic choices that contribute to the automation of business and transverse processes.
The current financial landscape is totally overburdened by artificial intelligence, data analytics and outsourcing, so it must support the Directorate-General in technological choices that will impact the company in the long term. These choices are both internal, through the implementation of new projects, or external through acquisitions of Fintech or Regtech startups that will allow the company to cross competitiveness thresholds. The extent of these changes can range from a simple improvement of tools for consolidating and harmonizing reporting to the use of predictive analysis to optimize decision-making.
A stronger role in business and strategy
The role of the DAF, initially centred on the formulation and management of the company’s financial policy, must now take into account the digital transformation of the whole company.
The organisation of the Finance Directorate around the new role
The Chief Financial Officer needs to put in place an integrated mechanism that will enable him to be proactive both on his traditional missions and on his role as a smooth Business maker.
It cannot therefore be excluded that the size and profiles of the CFO team are changing to meet these new challenges. In addition to the Finance Directorate’s traditional business lines, additional profiles will be required to respond effectively to mergers and acquisitions, economic optimization, etc.
Recurrent activities such as the preparation of accounts, cash flow forecasts and the production of dashboards will therefore have to be carried out in parallel with a project operation to deal with the new type of subject mentioned above.
On growth decisions (takeover, integration of another company, or IPO), the advisory role of the DAF takes on its full scope: the Financial Directorate is the preferred interlocutor of the Managing Director (or the President).
The Financial Officer is the privileged contact of banks, shareholders, various national and international authorities, public and parapublic representatives, markets and auditors, and also becomes the interlocutor of the various operational funds and support services of the company.
A change over time
Today, although this new role is not yet widespread, current economic developments and new business priorities are showing a trend which should be consolidated in the medium term.
The challenge will be to find the right balance according to the culture of each company and the skills of each CFO. We must avoid falling into an excess which reinforces the image of the DAF as a self-censor who, out of excess of caution, retracts the initiatives of the operators, or conversely, abandons its traditional activities.
Even though the various recent economic crises have given weight to the financial approach and, in fact, has put the CFO back at the centre of the game, it remains that the right balance between financial and operational work is the key to their quality.
The Financial Officer will be increasingly obliged, if only for the sake of credibility with the other directorates, to address the problems of the company in its transversality, and to promote communication between the trades.
