A survey of CFOs last spring revealed that 81 percent feel their daily workload is heavier than that of other C-Suite executives. Today’s CFOs are expected to oversee everything from cyber risk to evaluating new technologies—responsibilities that go well beyond traditional finance.
While this kind of “job creep” has long been considered par for the course for anyone with a ‘Chief’ title, the CFO’s role has expanded even faster than that of other C-Suite leaders.
This became even more apparent after the recent closure of Silicon Valley Bank (SVB), which revealed the bank had no Chief Risk Officer (CRO) from April 2022 to January 2023. It's still unclear how many of those responsibilities were shifted to SVB’s CFO Daniel Beck on a daily basis, but both Beck and SVB CEO Greg Becker were named in a class-action lawsuit for failing to report risks to investors before the bank collapsed.
Of course, this is a unique case—and the CFO’s responsibilities at an innovative startup will look very different from those at a major lending institution.
Still, there are ways CFOs can keep “job creep” in check—even when market pressures and company finances start to stretch their roles thin.
Never underestimate risk
To start, executives should look at the SVB situation as a lesson in what not to do. Managing risk—while it’s something that needs to be shared across the company—deserves a dedicated executive role.
While early-stage companies may hesitate to add to their executive team when resources are tight, having a CRO can actually boost your company’s credibility with investors—and serve as a crucial link between external stakeholders and internal operations.
Organizations considered “critical infrastructure,” like financial institutions and energy providers, must have an executive dedicated to risk management. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—and the far-reaching Global Data Protection Regulation (GDPR) from the EU—have made compliance and risk management a much broader mandate for all consumer-facing organizations. As a result, SaaS providers of all kinds—especially larger companies operating both inside and outside the EU—are now wise to have a dedicated CRO to ensure legal compliance and best practices for data responsibility and security.
The CRO (or executive-level risk manager) should be responsible for:
- Developing and executing “risk maps” and strategic action plans to address key threats (including cyber threats, regulatory non-compliance, and providing a “gut check” on the CFO’s financial planning);
- Sharing risk analyses and progress updates with executives, board members, and employees;
- Assessing operational risks that come from employee mistakes or system failures that could disrupt business;
- Supporting the CFO with due diligence and risk assurance during business deals or M&A activities.
CFOs also need to break old habits and embrace new tools and solutions that are better suited to today’s work environment. Several major trends in the private sector have contributed to this new definition of the CFO’s role.
The COVID-19 effect
Perhaps the biggest driver of the CFO’s evolution has been the COVID-19 pandemic. With employees working from home, adopting new tools, and developing new skills to keep businesses running during global shutdowns, many CFOs took the lead in guiding companies through these new realities.
According to DataRails findings, 33 percent of CFOs were responsible for leading new technology implementation during the pandemic, while one in five increased both the frequency of their forecasting and their employee headcount since March 2020.
To put this in perspective, SaaS adoption jumped by more than 62 percent in the first year of the pandemic. Whether directly or indirectly, CFOs were responsible for approving the operating budgets that brought these tools into the company’s IT stack. While CFOs didn’t make these decisions alone, the surge in SaaS adoption was still a major shift from what many financial leaders had planned before COVID-19.
Despite more SaaS, many CFOs remain old school
Another takeaway from the DataRails survey: even though many CFOs have overseen the adoption of new technology, most of their daily work is still highly manual.
More than 70% of CFOs surveyed still rely exclusively on Excel for budgeting and forecasting. Yet, only 18% consider themselves Excel experts, and just 30% say they’re “advanced” users.
Spreadsheets—and Excel in particular—have always been and will continue to be essential tools for CFOs. But by not adopting automation or other solutions to enhance these spreadsheets (or at least getting more advanced Excel training), CFOs may be willfully slowing down processes across the company. In fact, 47% of CFOs in the DataRails survey said relying on manual processes limits their ability to take part in strategic decision-making.
This has led to less time with family and greater job dissatisfaction overall, with nearly a third of CFOs admitting that “constant spreadsheet work left them bored.”
More mobility among CFOs as desired skills evolve
Between 2020 and 2021, research from Russell Reynolds found that the retirement rate for financial executives jumped from 45 percent to 52 percent. There are many possible reasons for this—retirements increased across the board at the start of the pandemic, then leveled off after the initial shock of the COVID-19 shutdowns.
However, as we recently pointed out, CFOs are staying in their roles for less time overall. According to a recent FTI Consulting survey, 59% of CFOs had spent less than five years at a single company as of 2022.
Again, this isn’t necessarily a problem for businesses. It’s a sign that leaders across industries—and at companies of all sizes—are figuring out what they really need from a CFO. Some teams want a CFO who can help manage accountability, especially in sectors with complex compliance requirements. Others, on a fast growth track, may look for a CFO with a strong deal-making background.
Increasingly, though, startups need financial leaders who can take a broader, operational view—playing a key role in decision-making across departments to ensure the company has enough runway in the face of volatile markets, new technologies, and more demanding customers.
Get a complete picture of your operations—for tax season and beyond
At Boast, our goal is to give innovative businesses access to our AI-powered platform and years of expertise—so you can maximize your R&D tax claims and gain visibility into how every part of your business works together to drive real results.
By seeing—through a single dashboard—how each employee contributes to your company’s output and innovation, finance teams can spot opportunities to optimize across the business. This not only means less time wrangling spreadsheets for R&D tax credit studies, but also gives finance teams actionable insights to better communicate and pitch strategies to other decision-makers.
To learn more about how founders can leverage non-dilutive funding options to fuel growth, check out our recent blog: Funding your startup with government grants.
