As the complexity of our working world continues to increase, the question for many CFOs is: “What does it take to succeed in a new role as a chief financial officer in today’s world, and what will it take in the future?”

Drawing on interviews with 40 experienced European and African CFOs, a new report from Heidrick & Struggles uncovers and addresses some of the main challenges faced by current and prospective finance leaders. The report, First-Time CFO guide, offers a range of diverse perspectives on what success can look like in this position; many of which would notably differ if compared with the same role just a few decades ago.

Today, the CFO performs many roles, acting as adviser, technician, strategist, leader, influencer, and mentor. Finance leaders must master a broader set of responsibilities than the role entailed 10 or 20 years previously. For those entering their first CFO role, the change in responsibilities and remit can seem daunting.

However, our distillation of the combined knowledge and experience of executives working across diverse industries offers a path forward for all, signposting and advising on some of the major step changes and challenges that come with the CFO position.

Beyond the numbers

The CFO role calls for both deeper and broader interaction with company stakeholders than necessitated by other positions that a finance leader may have held previously, such as divisional CFO or financial director.

Prioritising transparent and clear communication by investing in stakeholder relationships and building trust becomes critical. In fact, one long-time CFO considered building communication capability to be the most important skill a new finance leader can develop, emphasising that it was critical to develop “the ability to create strong professional relationships with investors, board members, team members, the executive committee, and sector workers”.

For those new to complex stakeholder management responsibilities, it is important to note that each part of the network should be met with a different communication style. Board interaction, for example, is a first for many incoming CFOs, and stepping through the boardroom door can be nerve-wracking.

Yet, by managing this board relationship effectively, finance leaders can drive better, more efficient board discussions and decisions. Again, clarity, transparency, and simplicity are vital: in the words of one CFO, “No board director ever asked for more pages to read. Less is almost always more.”

Confidant, consigliere, co-pilot… successor?

The scope and scale of the CFO’s co-stewardship remit is expanding, and their relationship with the CEO will dictate their success as co-pilot. As one CFO succinctly put it: “The CEO has all the authority; you carry half the risk.”

As the CEO’s right hand, CFOs need to build a positive relationship, establish trust, and align their objectives. “When you become a CFO, you recognise that most of your power comes from your relationship with your CEO. And if you do not have the right relationship, then it’s not a great place to be,” said an experienced finance leader. As one of the few people positioned to challenge the CEO, the CFO needs to be “able to speak truth to power.” However, as the CFO can be a potential successor to the CEO, this adds complexity to the relationship.

To minimise public discord, or risk undermining the CEO, one contributor suggests counselling them privately. The relationship between the CEO and the CFO also comes to the fore within the boardroom.

To maintain trust, the board needs to see the CFO as independent, and not just a mouthpiece for the chief executive, but this independent viewpoint can cause friction between the CEO and their finance chief. A sensitive and considered approach to this key relationship is pivotal to becoming an effective CFO.

Responsibility for the future

Openness to change and awareness of possible future market and business developments are key CFO attributes. Understanding and embracing technological change is often crucial to understanding how new technology will transform not only the finance department, but also the business.

Monitoring emerging trends allows the CFO to react quickly to new circumstances and different stakeholder demands. “You need a healthy understanding of systems and processes, and a clear view of arising opportunities. This includes curiosity and openness for new systems, including AI,” concluded another executive.

In many companies, the CFO’s remit increasingly includes ESG reporting, measurement, and strategy. Contributors emphasise the role of a sustainable business model in the evaluation of the company, as well as future development or investment. The ESG agenda now touches everything a company does and everyone who works there. One CFO urged others within the role to “Believe in equality, diversity, environmental and social equity. The younger generation will leave if the company leadership doesn’t live these values.”

Planning for the journey

With the number of first-time CFOs in European businesses rising, and the role itself changing rapidly, it can be a challenge for those new to the role to identify key priorities in their journey to becoming a successful finance leader.

Heidrick & Struggles’ interviews with current CFOs reveal some of the most important step changes for the future. Ultimately, there is no single blueprint for a CFO, but a fair chance at success can be achieved by developing both functional and personal leadership, embracing stakeholder relations, forging new relationships with the CEO and board, and accepting varying degrees of ownership of the ESG agenda and technology uptake within the organisation.

Effective performance in this fast-evolving role, within our shifting economic, technological, and social landscape, necessitates agility, adaptability, and curiosity.

Susie Clements is a partner in executive search company Heidrick & Struggles’ London office, managing partner of its corporate officers practice in Europe & Africa, and a member of its CEO & board of directors practice.