Today’s business environment is changing rapidly and the role of the Chief Financial Officer (CFO) is experiencing major changes. Finance leaders are now focused on adding value in all three areas: financial, social and environmental. As a result, companies are now appointing Chief Value Officers (CVO) to take on tasks that extend beyond standard financial management.
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Past the Figures: CFOs Responsibilities Are Growing
Historically, CFOs were charged with overseeing financial accuracy, overseeing risks and delivering what shareholders expected. Today, a CFO is asked to blend strategic plans with data analysis, encourage innovation, include ESG matters and engage with stakeholders.
McKinsey & Company says that around 60% of CFOs are influencing corporate strategy, digital change and sustainability efforts. The rising impact comes from realising that lasting value in the 21st century comes from impact and trust, as well as profit.
The Appearance of the Chief Value Officer
The basis for the Chief Value Officer is Integrated Thinking, developed by the International Integrated Reporting Council (IIRC) to encourage businesses to account for how different types of capitals contribute to lasting value. As organisations are urged by regulators, investors and consumers to become more sustainable, the CVO is leading the way in achieving integrated results.
According to a report from EY, almost eight out of ten institutional investors incorporate ESG considerations into making their choices. Often, the CVO – an expanded CFO – converts non-financial data into vital priorities that promote the company’s aims and profits.
Re-skilling Finance for the Future
To fit their bigger responsibilities, those in finance are learning more about sustainability, digital methods, supporting stakeholder capitalism and measuring impact. Leaving aside accounting, leading organisations recommend that CFOs develop skills in systems thinking, act ethically and collaborate with people from other departments.
Digital tools are a key part of what is happening now in medicine. By using advanced analytics and scenario modelling, finance leaders can assess risks, look forward at future results and relate capital decisions to the goals of the organisation.
Finance Will Help Address Society’s Most Important Challenges
Being appointed Chief Value Officer is crucial for finance leadership to further advance. As the concept of business success evolves, the next generation of finance leaders will need to design and maintain lasting value for their organisations.
