CFOs and risk management are just friends

According to a study based on conversations with almost 2000 global CFOs (that includes 17 of the DJIA companies), they love risk management. (Well maybe “love” is a strong word; maybe saying CFOs and risk management are “friends” is better.)

According to Bill Fuessler, who co-authored the study, CFOs “are moving away from their transaction activities–and paying more attention to the integration of data” and ” the CFO position has evolved into a much more strategic role as they take on more involvement with risk management.” (Maybe “friends” is also too strong a word. Maybe it is more accurate to say that CFOs have met risk management a few times for drinks but have agreed to still seeing other people.)

The author also notes that the two biggest jumps in CFO responsibility have been “driving integration and supporting managing enterprise risk” which apparently have “doubled in importance in the last five years”. (How does something double in importance? Couldn’t that imply that five years ago CFOs were spending 1% of their time on risk management and today that is 2%? Am I understanding this correctly?)

I have my doubts about this study. I thought global CFOs were busy with all this IFRS silliness? Clearly managing risk is a value-added activity but I have also seen first hand that CFOs, VPs of Finance and comptrollers are spending too much of their time on transactional activities like reconciling GLs, legacy systems to books of record and inter-company bank accounts. Meanwhile their period end processes are taking weeks instead of days to complete. Processes are still largely manual and in managed by spreadsheets. And while some companies have full automated month end processes, I would be shocked if this was the norm and not the exception. After all, don’ t they call it  “month end” because it takes a month to complete, Sergio?

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