Cost cutting tops the agenda for finance leaders with talent challenges, automation and cybersecurity emerging as other key priorities.
- Investing in new talent or in upskilling existing talent is a priority for finance leaders to drive growth in the coming year.
- There’s an increasing technology focus of the CFO role, but the finance leader needs to reimagine the use of automation for enablement of the finance function.
- ESG and non-financial reporting continues to be viewed as a compliance issue rather than a zone of opportunity.
The results of EY Ireland CFO Survey 2023 reveal a cadre of finance leaders who are optimistic for the future despite the cost and inflationary pressures, welcoming of changes to the nature of their own roles, and embracing of the technological advances. The agility and positive mood of the finance leaders in Ireland is tempered by a clear-eyed realism about costs and talent, with cost reduction emerging as the top priority for the coming years. There’s a continued focus on investment in talent as a means of addressing immediate and future challenges.
The environmental, social, and corporate governance (ESG) agenda though has fallen in importance over the course of the past year and that may be a cause for concern, given the pace of change in both the regulatory and investment environments. It is to be hoped that this trend will reverse itself as finance leaders and their organisations come to grips with current challenges.
CFOs seen to lead data-driven projects and strategic automation within the finance function.
Chapter 1: Upbeat about economic growth, broader scope of role
The spotlight of the survey, conducted among 151 CFOs and finance leaders in Ireland, is on the strategic shift in the CFO’s responsibilities, their role in improving the sophistication of non-financial/ESG reporting as well as their focus on supply chain and cybersecurity issues. The survey also highlights the priorities of finance leaders from organisations across sectors* to drive efficiencies and support data-led transformation amid mounting challenges stoked by the ongoing energy crisis and recessionary pressures.
According to the survey,
of the respondents claim to be optimistic about the economic outlook and business prospects for the next 12 to 24 months
Just say they are a little or very pessimistic.
The latest Central Statistics Office data indicates that Ireland’s economy grew by 8.2% in 2022, despite slipping into technical recession in the final quarter. The Central Bank of Ireland has forecast growth of 3.1% for 2023 and 2.9% for 2024.
“Finance leaders are more optimistic than we might have expected them to be. This is likely a reflection of improving sentiment regarding the state of the economy,” said Derarca Dennis, Assurance Partner at EY Ireland.
The positive outlook extends to expectations for growth in their own organisations. On average expected growth for the year ahead is 12%, similar to the EY Ireland CFO Survey 2022. However, 40% say they are unsure yet of their expected growth.
“The continuing war in Ukraine, rising geopolitical tensions in other regions, and ongoing macroeconomic developments are all contributing to a high level of volatility. That may be a factor in the high number of respondents who declared themselves unsure of expected growth for their organisations in the year ahead,” said George Deegan, Assurance Partner at EY Ireland.
Pivoting remit: CFOs are also largely positive when it comes to their own roles. 59% claim they are satisfied in their roles at the moment and 40% say they are either happy or excited in their roles at the moment.
These findings are interesting in light of the evolution of the CFO’s role in recent years. According to the survey, 61% say their remit has changed to drive strategic automation within the finance function in the past two years, with 54% saying it now includes a greater focus on ESG and non-financial reporting.
When it comes to the increasing technology focus of the CFO role, 87% of the respondents claim to be either excited or relatively happy about it saying they enjoyed expanding their skills in light of evolving job functions.
That finding is unsurprising given the eagerness with which finance professionals have embraced new technologies over many years.
The overall picture that emerges from the EY Ireland CFO Survey 2023 is one of a positive frame of mind on the part of CFOs as they help their organisations thrive in a challenging global environment and reimagine their roles as strategic business partners.
“Today’s generation of finance leaders are enjoying the pivotal role they are playing at the crossroads of their organisations. Instead of being asked to report on what happened in the past they are being asked to predict what will happen in the future. The results of our survey also reveal a cohort of individuals who thrive under pressure and approach change with relish,” explained Derarca Dennis.
Recommendations for future focussed CFOs:
- Adopt an agile mindset: Evolution of the role requires agile finance leaders who are thinking differently, listening, and responding to a broader stakeholder community.
- Acquire diverse skills: The new shape of finance reporting requires CFOs to master a diversity of skills, especially a deep understanding of non-financial factors.
*Ranging from manufacturing, professional services, retail, construction to healthcare.
(Base: All CFOs or similar, n=151)
**Those saying yes