Roundtable: Navigating the Journey to CFO; Insights and Perspectives
Climbing the corporate ladder to become a Chief Financial Officer (CFO) is a challenging yet rewarding journey that demands a diverse skill set and strategic mindset. In a recent discussion hosted at Langan’s in Mayfair, we welcomed 13 CFOs and Finance Directors from across the energy, natural resources and infrastructure industries to share their experiences and insights, shedding light on the multifaceted nature of the role, the importance of skill development, and strategies for success.
“You are not going to know everything.”
When stepping into a CFO position, you will be on a constant journey of learning and development once you’re in the role, so you do not need to be perfect on day 1. This was no better highlighted than by the unexpected nature of being promoted to CFO whilst on holiday. You have to take these opportunities when they are available.
“Getting to CFO is about understanding the experience that you don’t have – it is your responsibility to create the time to get this experience.”
Strategies for aspiring CFOs should include the importance of self-assessment, matching skills to business needs, and building a complementary team. This can also come through shadowing an existing CFO to develop a more comprehensive skill. For example, qualified accountants may often not have had the exposure to debt / equity experience versus those who came up the investment banking path and may themselves not have had exposure to accounting and reporting. Aspiring CFOs must proactively seek opportunities to gain experience in areas beyond their comfort zones.
“Contrary to popular belief, being a CFO is not solely about financial reporting.”
The CFO role involves a myriad of responsibilities, including Investor Relations (IR), Public Relations (PR), Human Resources (HR), and navigating complex commercial transactions. The transition from a Controller role to CFO requires understanding the functions of Capital Markets and the ability to secure funds for business needs. The adjustment from M&A or Project Finance means that not every moment is based around a deal or pitch.
“It is very easy to sit in the ivory tower and preach, but you need to get out into the business and understand the operational issues in the business.”
There is a lot of respect to be gained, and trust to be earned by heading to the coal face. Examples provided included spending time at site, with operating teams, often overseas, before transitioning back to a CFO role in at the HQ. Moving into a regional position or overseas secondment can do wonders for building relationships with teams on the ground by fast tracking your knowledge of people and culture; or indeed when in the role by travelling across the operating sites on a regular basis.
“A CFO will not talk about numbers all day.”
Building relationships with non-executive directors and managing upwards are vital skills, highlighted by our co-host, who has been a Chair and private equity investor across the energy and infrastructure space. The CFO role requires effective communication, both internally and externally. Preparing the board ahead of time and managing expectations are crucial elements of successful communication.
“You need to love the role and accept it will be demanding.”
CFOs face the challenge of balancing fund-raising, crisis management, and daily transactions. Strategies for effective time management can include early mornings, prioritisation, and accepting the flexibility required for the role. You need to love the role and accept it will be demanding. Equally, recharge during quiet periods and take timeout for self-care to ensure you are a long-term success.
“CFOs must be prepared to face blunt discussions with boards.”
Investors want a CFO who can not only manage the financial aspects proficiently but also contribute to the company’s strategic direction and success, while maintaining transparency and integrity in all financial dealings. CFOs must be prepared to face blunt discussions with boards. Remember that nobody likes a shock.
“You must understand the business, a CFO cannot be pulling out accounting standards in an argument. You must be able to talk the language of business.”
Building relationships, managing risks, and understanding the business inside out are integral. The importance of understanding and communicating with the business, using common language, not finance speak, especially during crises, puts you at an advantage. Board members can be extremely blunt and without that pre-work on building relationships, conversations and discussions can get hijacked.
“CFOs must have the ability to manage upwards and having a positive mindset toward problem-solving, is paramount.”
There is a multitude of challenges for any aspiring and current CFO to face not least to mention managing boards, navigating political dynamics, and finding alternative funding solutions. Measuring the barometers of success can include structured scorecards, successful team management and being engaged with your team along with the ability to forecast and add value. Rounded experience, commercial knowledge, and the capacity to communicate are essential attributes. CFOs should be prepared to deliver bad news and provide solutions.
“As CFO you are an executive and owner/custodian of the business, therefore you need to be flexible to its needs.”
Becoming a successful CFO requires a combination of technical expertise, effective communication by talking the language of the business, and strategic thinking. Aspiring CFOs can learn valuable lessons from the experiences shared by seasoned finance leaders, helping them navigate the challenging journey to the C-suite. These opportunities do not come to those who lie around in wait, they are more likely achieved by those who have built up the hard yards, demonstrated their capability to go beyond the numbers and have enabled the talent around them to maximise their own potential.
We extend our sincere thanks to all the attendees for their invaluable contributions and active participation during the Roundtable.
