People and talent are a top-of-mind priority for Chief Financial Officers, reveals Deloitte Southeast Asia CFO Agenda 2022 report

PHNOM PENH, 3 November 2022 – People and talent issues have emerged as the most important area of concern for Chief Financial Officers (CFOs) in Southeast Asia. This is according to a new Deloitte report that summarises a study of 89 Southeast Asia-based CFOs and finance leaders across a wide range of industries and finance team sizes to understand their key concerns for the year ahead, changes to their scope of responsibility, as well as capabilities and skillsets considered to be important for themselves and their team.

The report “Southeast Asia CFO Agenda 2022: The evolving roles of the CFO” reveals that 91 percent of the survey respondents indicated that they are extremely or moderately concerned with people and talent issues. This is a marked 18 percent increase from 2021, where 73 percent of respondents indicated this concern.

“Many CFOs in Southeast Asia face talent issues broadly across two dimensions – talent retention and reshaping the finance workforce in the face of increased expectations from the finance function,” says Mr Timothy HO (何国华), Deloitte Southeast Asia CFO Program Leader. “Experienced finance talent is highly sought after in the market. At the same time as CFOs continue to transform finance, including bringing in more digital enablers, the existing workforce will need to reskill and adapt to work alongside next-generation digital tools.”

The report also highlights a couple of consistent concerns. 71 percent of respondents indicated that they are extremely or moderately concerned about supply chain disruption, compared to 67 percent in 2021 – an increase of five percent. Widespread supply chain disruptions continue to drive volatility and impacts reliability for forecasts and projections. As strategies to mitigate supply risks continue to be a focus for many companies, CFOs are likely to prioritise their efforts in leading functions to interpret and plan for potential impacts in 2023.

In terms of digital disruption, 70 percent of respondents indicated extreme or moderate concern, 4 percentage points up from 2021’s 66 percent. Against today’s backdrop of rapid business model changes and accompanying growing demand from stakeholders for real-time financial insights, CFOs are recognising the importance of arming themselves with more advanced digital tools to deliver planning, forecasting and analytics in a fraction of the time that was previously required.

The evolving roles of the CFO

Nearly three-quarters (72 percent) of respondents reported higher demands or expectations from their C-suite leadership team, while almost half (47 percent) reported broader functional responsibility compared to before the COVID-19 pandemic.

The roaring pace of change in recent years has exerted a significant – and perhaps irrevocable – impact on the role of the Southeast Asia CFO and how they operate within their organisations. These additional expectations have elevated the CFO’s status within and beyond their enterprise. No longer primarily stewards of financial assets, CFOs must now operate as true strategic advisors – and not just as functional leaders. CFOs should take this opportunity to step up and take on more strategic and expansive roles.

Capabilities and skillsets

The top four capabilities ranked by respondents as important to them within the last two years included not only the traditional domains of operational effectiveness (66 percent) and financing and liquidity (43 percent), but also capabilities required for them to fulfil their new roles as strategic advisors – namely planning and analysis (58 percent) and transformation (43 percent).

Business knowledge and judgement was ranked the first or second most important skillset by 70 percent of the respondents, showing that CFOs recognise that to be strategic advisors, they must possess knowledge and insight into the critical business issues, and exercise their business acumen and judgement, and analytical capabilities to capitalise on growth opportunities presented by the volatile economic environment.

“It is imperative for CFOs to become an effective change partner as their organisation embark on a transformation journey. For a start, they can convey a coherent and consistent change narrative, given their understanding of the business needs and long-term value, to tell the stories behind numbers,” says Timothy. “They should focus on strategic capabilities and skillsets that go beyond foundational finance and accounting competencies. This means developing tech-savvy talent with capabilities in new and emerging roles, and upgrade capital planning capabilities, invest in developing analytics and forecasting skills, as well as focus on honing business acumen and shifting from controlling to partnering.”

“Staying abreast of digital disruption is also paramount; CFOs must continually deepen their understanding of digital technologies and their potential applications for the finance function. To succeed in this new world, CFOs will need to embrace change; they must collaborate and communicate. With one foot on the business strategy and one foot firmly grounded in finance fundamentals, CFOs are the essential bridge between the business of today and the business of tomorrow,” concludes Timothy.

For more detailed information, visit: www.deloitte.com/sg/sea-cfo-agenda

Methodology

In the third quarter of 2022, Deloitte Southeast Asia surveyed 76 Southeast Asia-based CFOs or equivalent across the region and different industries to understand their key concerns for the year ahead, changes to their scope of responsibility, as well as capabilities and skillsets considered to be most important for themselves and their finance teams.

One-on-one interviews with 13 regional C-suite executives were also conducted to gain a more granular understanding of how the roles of CFOs and finance function have evolved. Their insights have contributed to the point of view presented in this report.

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