The position of Chief Financial Officer (CFO) differs fundamentally from that of their counterparts in company management. The CFO primarily serves the shareholders and only secondarily the CEO. While this principle is universally accepted in modern business and international law, it may not always be intuitively clear to CFOs themselves or their immediate superiors.

However, it’s essential to understand that the CFO is not in opposition to the CEO and the management team; rather, they are an integral part of it. Nevertheless, what sets them apart from other leaders is their role as internal skeptics and sparring partners in strategy discussions. Additionally, the primary focus of the financial leader and their teams is to provide accurate information to all stakeholders within and outside the company for decisionmaking and risk management purposes.

Traditionally, the CFO’s responsibilities included financial planning and analysis, budgeting, management accounting, tax reporting, and liquidity management. One notable recent trend in business management is the expanding role of the CFO in business development and strategic operations management. The CFO is evolving from being solely an accounting specialist to becoming the CEO’s right-hand partner and a permanent member of the board of directors.

Over the last 30 years, the strategic responsibilities of the CFO have undergone significant transformations. In the 1990s and 2000s, particularly in most developing countries and many developed ones, CFOs had to establish tax optimization systems involving international tax havens and secure timely bank financing, often relying on personal connections and tolerating conflicts of interest. The few exceptions among senior managers and bankers, primarily from top-tier institutions, merely reinforced this general trend.

In the 2010s, intensified competition across most industries, including global players, rapid technological advancements in public administration and tax control, the desire and ability of companies, their shareholders and management to enter international markets and attract capital through IPOs, all led to a rapid shift in financial management priorities. It became critical to demonstrate consistent growth, invest in electronic sales channels and business digitalization, sometimes at the expense of customer acquisition efficiency. Shareholders and executives encouraged financial teams to focus not just on business efficiency and operational automation but also on rapidly expanding into new regions and launching products, using external funding obtained through promising forecasts and creative reporting.

Furthermore, starting in 2020, the impact of the pandemic, accelerated business digitalization (driven more by necessity than by trends), geopolitical tensions, and the resulting fragmentation of the once-global world, intensified competition across most industries and significantly complicated operational processes, particularly for companies with access to international markets. Dependence on foreign suppliers and investors became more pronounced, and challenges arose in obtaining financing from foreign banks, as well as in purchasing equipment and raw materials.

In the past, organizations prioritized performance growth at any cost, often at the expense of investors or margins. Today, however, the focus has shifted towards profitability and operational efficiency, especially for medium-sized businesses. Those who survived the drying up of cheap international funding – successful entrepreneurs and senior managers – realized that sustainable business development requires the establishment of regular management accounting, an internal control system, and end-to-end process automation. Ultimately, this demands a radically new approach to company management, based on modern, comprehensive financial management principles.