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What’s important to CFOs in 2023
Six topics shaping the finance leader agenda
The modern CFO: Architect of self-funding transformation
With recessionary concerns easing, CFOs are turning their attention to the future – and business reinvention. But success will require striking a balance between cost-cutting and investing for growth, which 89% of CFOs surveyed in PwC’s Pulse Survey say is a top challenge to transformation.
As shifting customer preferences, regulatory changes, skills shortages and rapidly evolving technology threaten long-term profitability, CFOs are moving from protection to investment mode. They’re doubling down on new capabilities like GenAI and advanced analytics to create a mutually reinforcing transformation ecosystem that drives out-sized outcomes.
Balancing the risk — and ROI — of reinvention
Top-performing CFOs know that to accelerate the enterprise transformation engine, they’ll need a self-funding budget to power it. They also understand the importance of assessing potential risks at all levels — transformation, business, program, technology and data, along with security and controls — in order to increase value from investments.
Find out how CFOs are making way for growth in PwC's latest Pulse Survey
Enable growth
Growth in leaner times is possible, but CFOs are likely to be much more selective about spending, turning to advanced scenario planning and modeling to inform strategic capital decisions. Many CFOs say they’ve balanced price increases with long-term customer demand, fine-tuning their compensation strategies and even investing in selective, strategic hiring. M&A may be another option, but it’s critical to calibrate variables like potential supply chain and resource risks in their valuation models when assessing potential advantages.
68%
of CFOs say they’re confident they can achieve near-term growth goals.
Source: PwC Pulse Survey, November 2022
Looking ahead:
Despite economic headwinds, finance leaders aren’t losing sight of their long-term growth goals. But with less margin for error, it’s critical to invest more selectively with an eye toward achieving long-term goals. CFOs can work closely with their colleagues across the C-suite to adjust budgets and revisit pricing models.
Take action on ESG
Environmental, social and governance (ESG) issues continue to dominate the list of priorities for business leaders. Many CFOs are concentrating their ESG efforts around gathering the right data and creating consistent reporting metrics and frameworks in preparation for new SEC disclosure rules. By shaping policies, procedures and controls for climate data collection, CFOs can add rigor to help the business achieve investor-grade ESG reporting and begin to integrate financial and nonfinancial reporting ecosystems. They can also look at how their companies can make progress on decarbonization efforts by taking advantage of credits and incentives included in the Inflation Reduction Act.
Looking ahead:
CFOs are well-positioned to help their organizations take action on corporate sustainability goals, take advantage of benefits and comply with disclosure requirements. Finance leaders can determine what systems and processes must be put in place, what data must be collected and analyzed, and which stakeholders should be involved.
40%
of CFOs are establishing policies, procedures and controls for climate data collection
Source: PwC Pulse Survey, August 2022
Accelerate transformation
Facing a myriad of disruptors, companies in every industry are making strategic decisions aimed at remaining competitive in the market and with their people. Digitization, standardization and automation will be critical as businesses focus on solving problems for their customers in innovative, lasting ways. Many CFOs are investing in technologies like cloud and analytics to drive growth, but they’ll also need people with specialized skill sets. A finance team’s analytical skills and ability to quickly unlock insights from financial data are as important as the digital tools to inform strategic decision-making.
53%
of CFOs say they plan to accelerate digital transformation using data analytics, AI, automation and cloud solutions.
Source: PwC Pulse Survey, August 2022
Looking ahead:
CFOs can lead the way on business process standardization and digitization in the finance function and beyond. Enterprise digital transformation needs advanced analytics, artificial intelligence applications and cloud technology, the backbone of advanced financial tools. Finance leaders can plan for the cost of digital assets, as well as digital upskilling and mentoring, as people functions combine with tech.
Cultivate finance talent
CFOs have consistently cited talent attraction and retention as a serious risk — even more than their C-suite peers. No surprise when finance chiefs are navigating a complex, constantly changing environment in which their organizations are demanding greater insights to drive quick decision-making and enterprise value. In the face of a finance talent crunch, demand is high for those with broader skill sets, particularly in data analysis and forecasting — and the technologies that power them. Having the right mix of skills within their team can help CFOs drive growth goals, perform more accurate analysis and scenario planning, and increase enterprise efficiency and effectiveness.
Looking ahead:
CFOs recognize that business models have fundamentally changed — and with them, the role of the finance function. Despite economic headwinds and a tight financial labor market, CFOs may invest in targeted upskilling or even selective hiring to deepen finance’s capabilities in modeling, analysis and scenario planning. As demand drivers become more volatile, strategic CFOs can position finance as a nimble business partner that can work in lockstep with other business functions.
57%
of CFOs say in the next 12 to 18 months they plan to hire in specific areas to drive growth.
Source: PwC Pulse Survey, November 2022
Build trust and purpose
Trust is the new business currency for CFOs, influencing loyalty and buying decisions for customers, as well as employee retention. But it can’t be taken for granted. Today’s CFOs are expected to build trust with their stakeholders to deliver better, sustained outcomes — and lead on both business and societal issues. When senior leadership aligns around their customers’ and employees’ top priorities, they can help focus the entire organization on the most important trust initiatives. CFOs also have a unique opportunity to tie fiscal responsibility to transparency.
Meanwhile, with heightened concerns about cyber attacks and growing demands for transparency sparked by a new law and an SEC proposal, CFOs say their organizations are also enhancing their ability to manage cyber risk.
Looking ahead:
When it comes to transforming trust into action, CFOs have found themselves at the intersection of purpose and practice. Company-wide efforts—particularly regarding transparency, accounting and reporting insights—are now considered to be within the CFO’s expanding domain of accountability, while areas like cybersecurity and data privacy need funding to provide preemptive action.
87%
of business leaders say customers highly trust their companies when only about 30% do.
Source: PwC Consumer Intelligence Series on Trust, June 2022
