Treasury Management

The CFO's leadership in the company

April 3, 2024

If we consider that only 50 years ago, when the definition of CFO was first used, the person leading the financial area was exclusively associated with preparing the accounting books and balancing the ledger, their role and responsibilities have evolved significantly.

The speed at which their function has evolved requires them to quickly adapt and assume new tasks that allow them to participate in the strategic planning and management of the company's business, all while maintaining their "traditional tasks."

It's no longer about explaining what has happened, but rather focusing on the future, becoming the "pilot" who guides the organisation toward what is going to happen. This involves proactively identifying potential challenges and problems that may arise, thanks to their knowledge of key business variables.

Thus, their role has become that of a key figure in defining strategy, not only from a theoretical standpoint but fundamentally regarding the leadership of its execution, ensuring the company's future viability.

Corporate Strategy Pilot

We can draw an analogy with the task performed by a race car driver, who must pay attention to what might happen in the next few seconds (short term) while having previously established the steps to reach the "finish line" (long term), all without losing sight of the rearview mirror, remembering the "dangers" that have been overcome in the past.

Navigating this (significant) change involves taking on new challenges, for which they must first step out of their "comfort zone". This means no longer leading a department that interacts "as necessary" with the rest of the business, but instead actively and cross-functionally interacting with other departments.

At the same time, their business vision and knowledge make them a valuable partner for working alongside the CEO in defining and implementing the strategy. This implies an evolution in the role of the CFO, where they not only manage limited financial resources but also define business opportunities themselves.

Corporate culture, automation and emotional intelligence

Their leadership increasingly involves them in the creation and development of the company's corporate culture. For this reason, they need to have the right resources to rely on to help them navigate the "transformation" of their role, making the necessary changes to "free" up time to tackle their new objectives.

Therefore, knowing how to delegate certain functions of lower "added value" and automating tasks such as treasury management or accounting and bank reconciliation, which many financial teams still perform manually, become their "adjustment variables." Hence, the importance of having comprehensive solutions like Embat, which automate and centralise corporate treasury management in real-time and in one place.

However, not all the resources the CFO needs to incorporate are "technical" knowledge; rather, it tends to be the opposite. It becomes increasingly important to enhance the development of their soft skills to achieve objectives.

For example, they may have the best possible training, but in order to strengthen their leadership, the main condition is knowing how to interpret the emotional competencies of the people they interact with, which goes beyond their own team.

In the long run, what is the use of being able to measure the evolution of the company's strategy when it is not possible to do the same in relation to the satisfaction of the people who are part of the company?

Leading by example and cultivating a culture of trust

Leading means learning to trust, delegate, and give autonomy; in other words, guiding others with the main goal of bringing out the best in each person they interact with.

We shouldn't forget  that a key aspect of their leadership is having the necessary communication skills that allow them to ‘transmit’ the evolution of the business, adapting to the ‘language’ of the listener, as what interests a company employee is different from what interests a shareholder.

Similarly, their ability to generate commitment must achieve an "external" reach beyond the organisation itself, as they are ultimately responsible for presenting future business scenarios to the board or shareholders, enabling them to make the best decisions.

Overall, their role as an organisational leader is a necessary condition that requires changing their functions by adopting competencies beyond financial ones. The most positive aspect of this is the added value they can bring to the company's business and its future.

Co-founder @ Embat
Toni worked for over a decade at J.P. Morgan in Spain and the UK as the Executive Director of Investment Banking and Commercial Banking for family businesses before co-founding Embat.

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