“The Numbers Guy” – CFOs Set to Have Greater Influence
20 December, 2016
An interview with Fabio Sola, Network Director, conducted by Luigi Dell’Olio, for the article: “L’uomo dei numeri” anche nelle Pmi published November 21, 2016, inthe Affari & Finanza section of La Repubblica newspaper
How is the CFO role changing within Italian companies?
In recent years, the CFO has ‘brought us closer’ to the business, supporting the strategic decision-making of shareholders and top management. The fiduciary vision, and ‘economics’ of corporate decision-making, particularly financial planning, is, in fact, crucial to the success of a project.
What new regulatory and market changes are affecting this change?
After a period in which regulatory aspects remained central issues (taxation, accounting standards, etc.), beginning in 2008, market pressures are beginning to take on greater importance.
The first ‘wave’ has led to an increase in the importance of CFOs with strong financial skills, developed relationships in the banking world and exposure to debt restructurings and bankruptcy proceedings. At this stage, while risk management and compliance oversight are still important, in many cases the CFO is starting to be involved in business decision-making as well. The mix of factors that affect many companies today amplifies this central role: more and more challenging projects, international expansion and a frequent need to review the company’s business model.
What is the demand for this profile?
The recent years of crisis have seen the position of CFO return to the limelight, and start to be viewed more in a leadership capacity rather than as a simple “number cruncher’. Although not having avoided the sufferance found in many other managerial positions, who have seen mid-level support roles replace certain executive appointments, the CFO’s voice is still becoming louder.
Wages have also benefited, remaining firm relative to other managerial positions, with the average ranging from €80,000 gross / year for a small business to €190,000 for the largest, and in both cases with bonus and benefits. Higher levels are attainable, especially when the company’s objective is to have its CFO manage processes that the company considers critical.
The growing number of CEOs and general managers possessing a financial background demonstrates another positive trend, evidencing the fact that a financial background (from a technical and networking point of view) has strategic benefit.
What skills will help pave the way?
Nowadays, the corporate finance “generalist” is no longer in fashion. The classically sought-after skills continue to be a prerequisite, but companies are also expecting their CFO to have an edge in the areas that will advance their interests: the market value of their stock, the management of international projects and digitization of the business, to name a few. Given our international experience of managing executive search projects in over 30 countries, and the feedback gathered at our recent member summit, we can confirm that this trend is not isolated to the Italian market, but exists worldwide.
When speaking about internationalization, we must not forget about the English language. In the past, an Italian CFO could often get by without it, but today English is required constantly to manage relationships with shareholders, partners and customers. In the past, international groups took on an Italian CFO in order to extricate themselves from Italian tax affairs; today, they consider that person to be a long-distance business “partner”.