CFO competence ranked as a top factor in investor decisions

By Alexei Alexis by CFODive.com

• A CFO’s competence level is a top factor for investors considering whether to pour money into a business, finance software provider OneStream found in a recent survey.

• CFO competence was identified as the second-most important factor in investor decisions, ranking above the capability of the CEO, according to a report on the findings. Market expansion opportunity took the No. 1 spot as an investment factor.

• “The role of the CFO is becoming more strategic,” OneStream CFO Bill Koefoed said in an interview. “They need to be able to communicate the company’s strategy and how the company has been doing against that strategy.”

Investors are willing to increase their initial investment in an organization by an average of 2.6% when the finance chief is the main strategic growth driver, OneStream found. That number rises to 3.6% among the world’s largest asset managers, according to the research.

Nearly nine in 10 investors (88%) and 65% of business leaders expressed the view that the CFO role will become even more important to business success over the next decade.

The report comes as many CFOs find themselves navigating an expanding set of responsibilities and pressures.

More than 80% of finance chiefs say their role has grown significantly in the past five years, according to survey findings published in March by leadership advisory firm Egon Zehnder. Respondents in that study cited new challenges in areas such as the environmental, social, and governance space; mergers and acquisitions; and corporate strategy.

“Our study reveals a momentous evolution with ‘Super CFOs’ not just reacting to the changing business environment, but in fact driving it,” Arun Dhingra, global head of Egon Zehnder’s CFO & Audit Chair Practice, said in a press release at the time.

Similarly, OneStream found that a majority (67%) of CEOs believe an organization’s success or failure rests on the shoulders of the CFO. At the same time, the survey revealed that 69% of CFOs are struggling to drive organizational strategy and growth due to ever-expanding responsibilities.

The study also showed that finance chiefs are grappling with challenges such as limited cross-functional collaboration within the organization; technology limitations; and a growing skills gap in the finance department.

OneStream conducted a global survey of 1,500 business leaders including 1,000 CFOs, as well as 500 investors with assets under management of $10 billion to over $3 trillion.