By Ada Leung, head of ACCA China
CFOs live in a middle ground that requires them to be well versed on micro issues while keeping a firm eye on the big picture.
It can be a difficult balancing act to work in partnership with the CEO to guide an enterprise forward all the while acting as an advisor to the board, said participants at a series of ACCA roundtables on The Value of the Modern CFO held in Beijing and Shanghai.
Not all accountants are CFOs and, practically speaking, not all CFOs are accountants but accounting credentials can help finance professionals grasp the fundamentals that are so important to the understanding of a business, panelists said. At the end of the day, the CFO is the link between business and an often complicated regulatory environment. This is particularly true in the evolving China market where laws are almost always in constant evolution, regulations not always clear and companies may have to successfully navigate gray areas. That means that local knowledge can be a plus.
CFOs should be able to communicate those on-the-ground financial realities to regional or global head offices who are less concerned about the regulatory hurdles that may impede the implementation of a particular strategy and more focused on how to navigate those challenges. Culture can also have a very real impact on job performance. Asia culture is to be humble, not to have confrontation or conflicts with others. But the CFO has to keep in mind that he works for multiple stakeholders, even if the idea of the “Lau Ban” or big boss that rules over an organisation remains very much in play particularly in the larger state-owned organisations in China.
The picture of the ideal CFO that emerged from the discussions sets the bar high, particularly for finance professionals looking to shift into business leadership roles, to change the “F” to an “E”. For these ambitious CFOs, the role is much more than just numbers. A truly effective CFO should also be a partner to the CEO and other business heads. They should be open minded and be willing to find ways to solve problems, rather than just throwing up the regulatory roadblocks they encounter.
For corporations, finding and nurturing this ideal CFO can be as challenging in China as anywhere else, even if the challenges are different. Although there are plenty of talented people, only a small portion have a significant amount of experience working for large or multinational corporations and fewer still have the type of built-in, wide-angle lens that companies need. At the same time, there is still a penchant for constant job hopping that makes retaining top talent difficult. The idea of building a career with a single multinational takes a back seat when a 40 percent salary jump is on offer.
The roundtables in China followed a similar exercise in Singapore in March, when ACCA brought together directors and company executives to get their perspectives on what makes a CFO valuable.
The views in China echoed, in large part, those that came forward in Singapore while taking into account the realities of the China market. Participants in Shanghai, Beijing and Singapore agreed that CFOs play an immensely valuable role in their organisations. Yet, the not-so-veiled consensus in both Beijing and Shanghai was that CFOs are often too focused on the finance and regulatory side of the business to be effective CEOs. There are many, many talented finance professionals who communicate effectively and keep and eye on the macro-picture, but this is not the natural state of most CFOs.
More work is needed to nurture talent and help finance professionals step away from their spreadsheets or legal manuals and take up leadership mantle more frequently and with more self-assuredness. Go to our website to watch interviews with the CFOs that took part in this panel.