Risk & Economy » Unpacking the top five risks for CFOs in 2024

Unpacking the top five risks for CFOs in 2024

These risks present opportunities for growth and innovation

Unpacking the top five risks for CFOs in 2024

In a world where numbers meet strategy, and balance sheets dance with innovation, the role of the Chief Financial Officer (CFO) has transformed into an extraordinary symphony of art and science. But this shift is nothing new, if anything it is now expected.

Fast-forward to 2024 and the CFO landscape continues to shift, presenting both exhilarating opportunities and daunting challenges. So, what lies on the horizon for these financial trailblazers? What are the biggest risks they are likely to face as they embark to help steer their businesses through the next 12 months?

The mandate that keeps on changing

The CFO’s role has grown beyond financial expertise to include strategic decision-making, risk and stakeholder management. Today’s CFOs need to possess a diverse skill set that encompasses financial expertise, strategic decision-making, risk management, and stakeholder engagement. Furthermore, with technology playing a pivotal role in business innovation, CFOs must also be well-versed in leveraging emerging technologies to enhance business performance.

In a recent survey, 43% of finance leaders identified establishing finance as a partner to the business as one of their top priorities for the next 12 months. This highlights the need for CFOs to collaborate closely with their C-suite peers and leverage their unique vantage points to drive data-backed decision-making and cross-functional alignment.

Unlocking the ROI of reinvention

Top-performing CFOs recognise the need for strategic investments to drive enterprise transformation. However, 88% of CFOs and other business executives struggle to capture value from their technology investments. The challenge lies in integrating new technologies like GenAI in their business models and assessing the total cost of risk at multiple levels.

CFOs must collaborate with their Chief Information Officer (CIO) and Chief Transformation Officer (CTO) to align budget priorities, integrate strategic planning decisions, and respond swiftly to market changes.

Time to take climate action (for real!)

The growing focus on environmental, social, and governance (ESG) reporting has put climate action high on the CFO agenda. But it has been eclipsed in recent years by the advent of GenAI, soaring interest rates and growing geopolitical tensions. While compliance with ESG reporting requirements is crucial, CFOs can go beyond the basics and analyse how climate change scenarios may impact financial performance.

Research shows that 41% of finance leaders consider not meeting sustainability commitments as a moderate or serious risk for their companies. CFOs can leverage their forecasting capabilities and unique view of the business to develop sustainable strategies, explore tax incentives and green financing options, and align their organizations with decarbonisation goals.

The new finance function

As the CFO role expands, so does the influence of the finance function. With the vast volumes of data available, CFOs are increasingly assuming the role of data stewards. By leveraging advanced analytics and cloud technology, CFOs can drive strategic insights, improve forecasting accuracy, and optimize cash management.

The challenge lies in using these tools. The demand for talent with necessary strategy and tech skills is high, and 51% of CFOs plan to hire in specific areas to drive growth. CFOs must reimagine roles, reskill staff, and invest in both technical and non-technical capabilities to drive successful finance transformations.

Trust as a discipline

As primary points of contact for investors, analysts, and stakeholders, CFOs play a critical role in effectively communicating financial performance and the company’s strategic direction. With the proliferation of risks, such as geopolitical tensions and cyber breaches, CFOs and the executive team must practice agility and transparency.

By prioritising risk management, cybersecurity, governance, and controls, CFOs can foster a culture of trust and resilience throughout the organisation.

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