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The Human Capital Specialists | www.leathwaite.com
Global CFO Survey 2020:
The Challenges And Priorities
Driving Finance Leaders Today
2The Human Capital Specialists | www.leathwaite.com
The first thing to note is that in many ways,
CFOs have been readying their functions for
the practical implications of a crisis like this,
for a while. One of the most interesting
findings of our survey was that respondents
said the single item they were spending the
most time on was “process and technology
change” – above time with their internal
clients, managing their teams, dealing with
regulators or any specific technical item.
While in a pre-coronavirus world many CFOs
may have bemoaned the fact that systems
changes were taking them away from their
day job, many will now be grateful for this
investment as they navigate closing the
books with a fully remote team.
The second key point, building on this, is
that CFOs felt their functions were evolving
and benefiting from these investments in
technology and data. Analytics has
overtaken data as the primary focus area for
hiring, suggesting legacy investments in
cleansing data were successful enough to
enable functions to take the next step.
Further 60% of respondents said they were
using at least an intermediate level of
analytics in their FP&A functions, and over
65% said they were either using or planning
some sort of artificial intelligence or machine
learning within their function in the next few
years.
The third key issue is that even prior to
current market conditions, CFOs had already
sensed that cost management was going to
be an issue – identifying this as the biggest
factor they expected to impact their
functions in 2020. Nearly 45% expected
budgets to be cut, when many had shared
that they were already operating on a
reduced budget compared to the previous
year. Further, nearly half of all respondents
were already predicting headcount
reductions in their finance functions in 2020.
The constructive takeaway from all this is
that CFOs were already building tech-
enabled, cost sensitive functions, which
would equip them to weather a crisis such
as COVID-19. The challenge however, is that
cost was already being closely managed
and technology was already heavily
leveraged— so how much room is left
to stretch further as the pressure to lean in
augments around these topics?
Perhaps the biggest challenge of all for
CFOs will be coping with their new work
environment when only 7% told us flexible
working was something they were interested
in for the year ahead.
Each year we undertake our global survey of CFOs and their management teams. Our polling
took place prior to the widespread outbreak of COVID-19, and while it would be impossible to
pretend the events of 2020 will not impact some of our findings, we instead want to focus on
what we found, which may help CFOs and other finance leaders navigate the path forward.
Formal responsibilities aside, our respondents said that leadership was the most important attribute
in an executive, and we hope the attached report helps CFOs do exactly that during this time.
Introduction
3The Human Capital Specialists | www.leathwaite.com
As a finance professional, which trends do you foresee having the greatest impact on the
work you do within your organization over the next 12 months?
Even prior to the escalation of the coronavirus epidemic, cost management pressures were the lead trend in terms of having the greatest impact in the foreseeable future. Last year, the rise of agile working/flexible workplace was number 1 and interestingly this has slipped to almost last in the 12 months since then. We anticipate the trend of agile working will be normalized going forward.
1. Cost Management Pressures
2. Convergence of Finance and
Risk Requirements
3. Evolving Regulatory Demands
4. Finance processes being
undertaken via emergent
technologies, e.g. AI
5. Rise of agile working/flexible
working
6. Off and near-shoring of finance
processes
Lookback ‘19
1. Rise of agile working/flexible
working
2. Off and Near-shoring of finance
processes
3. Evolving Regulatory Demands
4. Convergence of finance & risk
requirements
5. Cost Management Pressures
6. Finance processes being
undertaken via emergent
technologies (e.g. AI)
What is your expectation of Finance
headcount within your company over
the coming 12 months?
Lookback ‘19
What is your expectation of Finance
budget within your organization over
the coming 12 months?
Lookback ‘19
2020 Results
Cost Pressures
4The Human Capital Specialists | www.leathwaite.com
What are the top 3 business challenges facing your Finance function over the next
12 months?
Leveraging data and analytics is the top business challenge for CFO’s as they see the benefits information can yield in collaborating with other business units. It is also worth nothing that even prior to current market events, CFOs had already predicted cost management and market forces were going to be high on the agenda in 2020.
1. Leveraging Data and Analytics
2. Digital Transformation/
Automation
3. Cost Management
4. Market Forces
5. Talent Retention
6. Pending Regulatory
Requirements
7. Current Regulatory
Requirements
8. Headcount Rationalization
9. Skills Shortage
10. Disruptive Competition
Lookback ‘19
1. Digitization/Automation
2. Cost Management
3. Pending Regulatory
Requirements
4. Current Regulatory
Requirements
5. Market Forces
6. Talent Retention
7. Headcount Rationalization
8. Brexit
9. Disruptive Competition
10. Diversity
2020 Results
// REGULATORY
REQUIREMENTS REDUCE IN
PRIORITY AS DIGITIAL, DATA &
ANALYTICS DOMINATES
Digitization: A Benefit and a Challenge
5The Human Capital Specialists | www.leathwaite.com
As well as being the biggest challenge, data management is also the area needing most improvement within the finance function. In our surveys of senior executives in other corporate functions, data and its management was also the biggest area for improvement, denoting that the issues is company wide across all departments. Diversity, technical skills and relationship with the board/audit committee have come consistently
last, implying they’re something the finance function does well or perhaps the demands of the jobs
simply take precedence.
1. Data Management
2. Process Optimization
3. Technology
4. Commercial Acumen
5. Efficiency
6. Growth Strategy
7. Organizational and Human Capital
8. Controls and Operational Risk
9. Delineation of responsibilities between
finance and business COOs
10. Diversity
1. Data Management
2. Technology
3. Efficiency
4. Controls & Operational Risk
5. Commercial Acumen
6. Delineation of responsibilities
between finance and business COOs
7. Technical Skills
8. Diversity
9. Relationship with Regulators
10. Exposure to the Board/Audit
Committee
Lookback ‘19
Please rank the following areas for improvement within the Finance function at your
company:
2020 Results
Getting to Grips with Data
6The Human Capital Specialists | www.leathwaite.com
Which of the following is your finance function using or planning to use within the next 3
years?
Not using Currently using Planning to use
Row % Row % Row % AI/Machine learning 32.7% 21.2% 46.2%
Blockchain 94.2% 1.9% 3.8% Industrial Internet of things
(Iot) 82.7% 3.8% 13.5%
Automation 5.7% 69.8% 24.5% Operational excellence 7.5% 62.3% 30.2% Vender consolidation 24.5% 39.6% 35.8%
Data quality and data sci-ence
13.2% 50.9% 35.8%
// OPERATIONAL
EXCELLENCE AND
AUTOMATION HAVE THE
HIGHEST PENETRATION OF
PEOPLE CURRENTLY USING.
THE NEXT BIG THING
PEOPLE PLANNING TO USE
IS AI/MACHINE LEARNING.
As the technology transformation continues, we wanted to see what platforms CFO’s are employing in their day-to-day and what they plan to use over the next 3 years. While CFOs are making good use of operational excellence and automation, taking the next step is planned. AI and machine learning continue to be a key focus on the horizon for CFOs. With cost efficiencies high on the priority list for the senior finance community, it’s hardly surprising they’re automating key finance processes, including data reporting and payments. 50% of CFO’s are utilizing data quality and data science in their current operations and nearly all that aren’t already, plan to do so in the next few years.
11% of CFO’s now have a dedicated cybersecurity person in their team, a trend that we expect will increase as finance functions further leverage next generation technologies. This is particularly the case given the specific risks inherent to cyber attacks on finance functions.
// Is This the Beginning of a New Priority for CFO’s?
Do you have a dedicated cyber-security professional in your finance function?
The Technology Transformation
7The Human Capital Specialists | www.leathwaite.com
To what extent are data & analytics capabilities used to support financial processes in your
organization?
Not at all Basic Intermediate Advanced
Row % Row % Row % Row %
Tax 22.6% 62.3% 11.3% 3.8%
FP&A 3.8% 35.8% 47.2% 13.2%
Financial reporting 3.8% 60.4% 30.2% 5.7%
Regulatory reporting 17.0% 49.1% 28.3% 5.7%
Treasury 15.1% 54.7% 28.3% 1.9%
FP&A has been the most proactive user of data and analytics, allowing CFOs and their teams to be more reactive in real time, streamline their data across various systems and uncover trends and deliver insights quickly. Most other areas are only utilizing data and analytics at a basic level. In light of the current situation, we expect the appetite to adopt more advanced data and analytics but finding the money to invest in these capabilities maybe challenging.
How effective do you think your strategies are in the following areas?
CFO’s felt they were particularly strong was in their internal controls over financial reporting, their reporting of financial performance and their strategies around planning budgeting and forecasting.
Poor Fair Good Excellent
Row % Row % Row % Row %
Cyber-security 7.1% 28.6% 54.8% 9.5%
Taxation 4.8% 28.6% 52.4% 14.3%
Cost optimization 4.8% 47.6% 42.9% 4.8%
Financial risk 2.4% 28.6% 57.1% 11.9%
Planning, budgeting and forecasting
9.5% 38.1% 31.0% 21.4%
Measuring and reporting financial performance
2.4% 40.5% 35.7% 21.4%
Internal controls over fi-nancial reporting
2.4% 28.6% 47.6% 21.4%
Regulatory compliance 0% 26.2% 57.1% 16.7%
// The Strategic CFO
Embracing the Basics of Big Data
8The Human Capital Specialists | www.leathwaite.com
If your Finance organization was to hire in the next two years where do you expect your
focus to be?
Leaders are focused on hiring individuals who can build the process that support the work, rather than people to “do” the work or analyze the outputs.
1. Analytics
2. Data Management
3. Financial Planning & Analysis
4. Finance Change
5. Financial Control
6. Near/Off Shore Hubs
7. “Business CFOs”
8. Treasury
9. Tax
Please rank the following qualifications in order of value when hiring professionals into the
Finance function over the next 5 years:
Beyond the mandatory professional accounting requirements, an MBA came up as the most desirable qualification when hiring professionals in the next 5 years, which supports the increased business and operational understanding necessary in senior finance roles today. A computer science degree was next on the agenda, which is in line with the finance functions needs around system-based transformations and understanding and managing data within the team. 30% of respondents even said they’d changed their hiring agenda in order to attract computer science talent into what might seem like a more traditional career path.
With computer science now on the
radar, have you made changes to the
hiring agenda to
attract these
professionals?
Lookback ‘19
1. Data Management
2. Analytics
3. Financial Planning & Analysis
4. Near/Offshore Hubs
5. “Business” CFOs
6. Finance Change
7. Treasury
8. Financial Control
9. Tax
2020 Results
1. Professional Accounting
Qualification (CPA, CA, etc.)
2. MBA
3. Computer Science Degree
4. Certified Change Qualification (Six
Sigma, Prince 2, etc.)
5. Quantitative Graduate Degree
(MSc/PdD)
6. Engineering Degree
Lookback ‘19
1. Professional Accounting
Qualification (CPA, CA, etc.)
2. Computer Science Degree
3. MBA
4. Certified Change Qualification
(Six Sigma, Prince 2, etc.)
5. Quantitative Graduate Degree
(MSc/PdD)
6. Engineering Degree
2020 Results
The 101 on Hiring
9The Human Capital Specialists | www.leathwaite.com
Do you feel the Finance function is appropriately valued within your company?
Lookback ‘19
Do you consider yourself a catalyst for
change in the company?
// From Guardians of Strategy to Change Agents
Just over 71% of finance leaders felt their finance function was appropriately valued and well respected internally, down roughly 6% from the previous year. CFO’s at companies with less than 250 people in their finance function felt the most valued with over 75% saying yes, whereas with functions over 1000, CFO’s felt their value dipped to 66%.
WHILE 98% OF SENIOR FINANCE
LEADERS CONSIDER THEMSELVES
A CATALYST FOR CHANGE WITHIN
THEIR ORGANIZATIONS, IT IS
CLEAR FROM THE ABOVE THAT
NOT ALL FEEL THE ROLE PLAY IN
DRIVING CHANGE IS
APPRECIATED.
Role of the CFO
10The Human Capital Specialists | www.leathwaite.com
Which of the following do you feel are viable routes for career progression for senior
Finance leaders within your company?
Lookback ‘19
Are you actively retooling and upskilling to fit the COO model?
While 49% respondents nominating a COO role as their most likely next position, it was down from 63% last year. Last year 43% of respondents said progress beyond the finance function within their organization was limited, compared to only 30% this year, which points to the fact that the CFO is now being considered for a variety of positions and their skill set is valued cross-company.
Role of the CFO continued
HAVING SAID THE ABOVE, THE
VAST MAJORITY OF CFO’S SAID
THEY ARE NOT ACTIVELY
RETOOLING FOR THE ROLE OF
COO DESPITE IT BEING THEIR
MOST LIKELY NEXT MOVE.
11The Human Capital Specialists | www.leathwaite.com
Life on the Job
Rank the below in order of time spent, with 1 being the task you spend the most time on:
Process and technology change is where CFO’s have been spending most of their time. While we expect a clear shift in these responses in light of world events, it is worth noting that prior to this, the top time intensive items on their agenda were not directly related to growing or managing the business. In fact revenue growth initiatives was number 6 and despite cost pressures being high, actual cost management was only at number 7. While time with other business leaders came in the top 3, time with corporate leadership was a few below, showing that CFO’s are spending time away from the function but more so with other functional leaders, their peers, as opposed to the highest echelon of corporate executives in their organization.
// The Farthest Shore
Does your organization utilize near/offshore capabilities?
1. Process and Technology Change
2. People Management
3. Time with Business Leadership
4. Core Functional Responsibilities
5. Time with Corporate Leadership
6. Revenue Growth Initiatives
7. Cost Management
8. Time with Regulators/Regulatory
Issues
LOOKING AT OFF AND NEAR
SHORE HUBS, THE RESULTS
REMAIN THE SAME YEAR
ON YEAR WITH 54% OF
CFO’S SAYING THEY UTILIZE
THESE HUBS.
12The Human Capital Specialists | www.leathwaite.com
As a Finance professional, which of the following would most interest you from your
employer over the next 12 months?
Increased total reward tops the list of what the senior finance community would most like over the next year, followed closely by executive coaching – unchanged from the previous year. The desire for executive coaching fits with the ascension of the CFO role and the belief that leadership skills, commercial acumen and stakeholder management are key to success in the executive suite.
Lookback ‘19
When considering how you and your organization prioritise skills within hiring at an
executive level, please rank in order of importance the following:
1. Leadership Skills
2. Stakeholder Management
3. Commercialism
4. Business Experience
5. Regulatory Knowledge
6. Technology & Experience
7. Data Insight
8. Core Accounting
Experience
9. Global Experience
1. Leadership Skills
2. Commercial Acumen
3. Stakeholder Management
4. Cultural Fit
5. Technology/Process Change
Experience
6. Global Experience
7. Core Accounting Experience
8. Diversity
9. Technical Skills
Lookback ‘19
Lookback ‘19
2020 Results
DNA of the CFO
13The Human Capital Specialists | www.leathwaite.com
Please outline your region:
Please confirm your industry segment: Within financial services, which sub-sector are
you in?
What is the size of the Finance function at your
company?
What is your functional focus within the CFO organization?
Who are you, Where are you
14The Human Capital Specialists | www.leathwaite.com
Today’s CFO is playing many varied and
diverse roles - from the more
fundamental stewardship of financial
operations, to technology innovator, to
catalysts for change, to strategists
helping formulate the overall direction
of the company.
In light of COVID-19, we expect the CFO to be
critical in navigating their companies through these
unprecedented times - this is the time for the
strategic CFO to shine.
Based on our findings, the challenge will be
reconciling vital ongoing and long term initiatives
with new short term priorities. Cost was already
under pressure, and the tools that will better
enable CFOs to support their businesses in a time
like this - better technology, data and analytical
support - require ongoing investment that may be
at risk for the same reasons they are required.
When we surveyed CFOs prior to this crisis, it was
clear an increasing number were thinking about the
next step in their career. While the short term will
be difficult for everyone, it can be assumed that
given the CFOs profile and their crucial role in
navigating this period, those who perform will no
doubt find themselves with an expanded list of
opportunities at the executive table.
About Leathwaite
Leathwaite was established with
one clear purpose: to help
organizations secure the best
Human Capital within Support,
Enablement & Control Functions.
Guided by our unique
company values:
Be Distinctive
You cannot lead by following. We
help clients, candidates and
colleagues understand why we are
different from the competition, and
how this makes us best placed to
help them achieve their objectives.
Maintain Humility
A culture in which the hierarchy is
flat and everyone is open and
accessible to others, enables
sharing and collaboration. We do
not allow title, rank or ego to cloud
this thinking.
Compete Together
A great team is bigger than the
sum of its parts. By pushing in the
same direction and driving towards
collective goals simultaneously, we
will ultimately achieve more and so
will our clients.
Conclusion
The Human Capital Specialists | www.leathwaite.com
Tom Pemberton
Partner, Global Head CFO Practice
New York
T: +1 646 461 9108
Owen Buckley
Consultant
New York
T: +1 646 461 3182
Stuart Higson
Consultant
New York
T: +1 646 790 3170
Martha Harvey-Jones
Partner
London
T: +44 207 151 5117
James Lawrence-Brown
Partner
Hong Kong
T: +852 3152 2463
Chris Rowe
Partner
Zurich
T: +41 44 214 6642
Please click on photos for bios
Sophie Roebuck
Consultant
London
T: +44 207 151 5129
Blake Jessee
Senior Associate
New York
T: +1 646 461 9100
Helen Parker
Consultant
London
T: +44 207 113 5130
Emily Woodward
Consultant
Hong Kong
T: +852 3695 5005
Meet the Team
