The Brief / Risk Management INTERVIEW
Managing the demands of an evolving business environment
ILLUSTRATION: GETTY IMAGES/SESAME
The importance of effective enterprise risk management has never been more crucial for senior finance executives
Stephen McNally
executives prioritising their objectives in such a climate?
What are the current challenges facing chief financial officers today?
Chief Financial Officers (CFOs) continue to grapple with significant business-related challenges in today’s dynamic economic environment. On the people front, these are things like the ‘Great Resignation’ and addressing hybrid work challenges. On the technology side, it is about working with emerging technology and automation, as well as facing problems regarding heightened cyber security threats. Then there is a greater regulatory and stakeholder focus on making businesses more sustainable and ESG compliant; CFOs are working hard with their teams to take progressive and strategic actions to meet these goals. On the people side, CFOs are cognisant that their workplaces, now more than ever, need to foster diversity, equity and 12
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inclusion while making it equitable for all. And finally, on the macroeconomic side, economic uncertainty continues with rising inflation and supply chain disruption. A recent report by the global body, Association of Chartered Certified Accountants (ACCA), Institute of Management Accountants (IMA) identifies emerging priorities that will impact the future role of the CFO. The Global Economic Conditions Survey cites several emerging issues that will shape the finance function’s top job. These emerging issues include regulation, globalisation, technology, risk management, transforming finance, stakeholder engagement, strategy, integrated reporting and talent. Geopolitical issues, rising inflation, supply chain challenges and other issues still plague companies. How are finance
Businesses operate in accordance with their vision and mission statements. Currently, businesses are facing a multitude of geopolitical and economic issues that are hindering management’s ability to execute forward-looking plans. Forecasting financial performance over the next few months, let alone accurately developing annual budgets and longer-term strategic plans, has become extremely difficult. Therefore, with different types of disruptions, businesses need to adapt accordingly, innovate, and find solutions. The first thing CFOs and their cross-functional partners need to do is stay calm and make a thorough assessment of the situation. The importance of effective enterprise risk management has never been more crucial. CFOs – using their ability to think strategically, analyse complex business issues and solve problems – should prioritise tighter cash management, fully understand their organisation’s financial position, strengthen their supply chain, and run multiple “what if” scenarios. CFOs need to balance between stabilising the business in the short term and focusing on identifying gulfbusiness.com
