Dear Readers,

The role of the Chief Financial Officer (CFO) has seen a major shift in recent years. Once known primarily as the keeper of financial records, today’s CFO is expected to take on a much broader role, driving strategy, embracing technology, and leading transformation across the organization.

Traditionally, CFOs were viewed as stewards of financial stability, focused on reporting and compliance. But today, they are at the forefront of strategic decision-making.



As Shiv Shivakumar, former India head of Nokia and PepsiCo and a management thinker said at the first edition of ETCFO NextGen event in Mumbai on Thursday, "The future CFO will play a transformational role, will do broader things, including strategy, IT M&A and ESG, will be master of capital and capital allocation, a master of stakeholder management, especially activist investors, and will harness tech."

Shivakumar said that 2025 priorities for CFOs are leading transformation efforts, improving finance function strategy and finance metrics, and optimising costs.

Also Read: The future CFO will have to play transformational role; faces challenge of managing activist investors, says Shiv Shivakumar

A galaxy of leading India Inc CFOs participated in the event to brainstorm on the changing role of CFOs and what it entails.

Modern CFOs are expected to be co-pilots to the CEO, shaping corporate strategies and influencing key business outcomes. This involves mastering capital allocation, not just to sustain operations but to fuel growth in areas like technology, sustainability, and market expansion.


CFOs are also broadening their expertise, venturing into domains like mergers and acquisitions, IT, and ESG (Environmental, Social, and Governance). They act as connectors across functions, ensuring that every department aligns with overarching business goals. Their ability to manage internal and external stakeholders, including investors, regulators, and even activist investors, underscores their importance in today’s business environment.

Technology is redefining how businesses operate, and CFOs are leading the charge in its adoption. From artificial intelligence to blockchain, these tools are no longer add-ons but core enablers of business processes. For CFOs, technology is a means to enhance efficiency, improve forecasting accuracy, and support data-driven decision-making.

AI, for instance, has transformed financial forecasting, reducing working capital requirements and inventory management timelines. CFOs are using advanced analytics to predict cash flows, identify market opportunities, and optimize costs. However, the challenge lies in adoption, not just implementation. CFOs are playing a key role in fostering a culture of digital transformation, ensuring technology is fully integrated into the organization’s DNA.

As Lalit Kasliwal, CFO, Tata International, speaking at the ETCFO NextGen event put it, "Today, return of capital and return on capital are key. Safeguarding capital makes investments in AI, blockchains, or similar areas viable. Return of capital must be strongly emphasised."

Also Read: CFOs emphasise on strategising finance priorities to enhance profitability in tech-driven world



Focus on sustainability

Sustainability is no longer a buzzword; it’s a business imperative. Investors and customers alike demand that companies operate responsibly, and CFOs are at the center of this shift. They are tasked with ensuring compliance with ESG norms, directing capital toward green initiatives, and aligning sustainability goals with business objectives.

Kaushal Parekh, CFO, Metro Brands, summed it up: "Gone are the days when businesses could ignore sustainability. Today’s customers are sensitive to it, so we collect and recycle footwear parts before they end up in landfills."

CFOs are also the custodians of financial transparency in ESG reporting. With more investors prioritizing sustainable practices, CFOs must ensure their companies not only meet but exceed expectations in this area. Their role involves balancing the cost of compliance with the long-term benefits of sustainability, from enhanced brand value to investor trust.

Risk management has always been a core aspect of the CFO’s role, but the nature of risks has evolved. From geopolitical tensions to cybersecurity threats, CFOs must anticipate disruptions and mitigate their impact. The rise of activist investors, who challenge companies on governance and performance, has added another layer of complexity. CFOs must engage with these stakeholders effectively, addressing their concerns while safeguarding the company’s vision.

Moreover, CFOs are expected to build resilience in their organizations. This involves diversifying revenue streams, optimizing cost structures, and ensuring liquidity during uncertain times. The focus has shifted from reactive problem-solving to proactive risk management, enabling businesses to thrive even in volatile conditions.

Also Read: NextGen CFOs must embrace tech, drive strategy, and lead change, say finance leaders

Collaboration and leadership

The modern CFO is no longer confined to the finance department. They work closely with CEOs, CHROs, and other leaders to drive transformation across the organization. Whether it’s redesigning processes, enhancing customer experiences, or integrating sustainability into the company’s core, CFOs play a pivotal role in shaping the organization’s future.

Leadership expectations have evolved too. CFOs are not just financial experts but also people leaders, fostering diversity, collaboration, and innovation. They must guide teams through change, build capabilities, and create an environment where everyone can thrive. Empowering teams and influencing organizational culture have become key aspects of the CFO’s role.

The road ahead

The NextGen CFO is more than a number-cruncher; they are visionaries who balance traditional financial responsibilities with the demands of a dynamic business landscape. They are the architects of growth, champions of sustainability, and stewards of technological progress.

Pavan Jain, CFO, Grasim Industries, said, "NextGen CFOs have to develop the skill of predicting the future, collaborate and influence different stakeholders with their data, analysis, and impact of decisions taken."

As businesses navigate an increasingly complex world, the role of the CFO will only grow in significance. From driving strategic initiatives to ensuring long-term resilience, CFOs are set to be the strategic pillars on which successful organisations are built. In this ever-changing environment, the ability to adapt, innovate, and lead will define the CFOs of the future.

The words of Niranjani C, CFO - India, Europe & World Travel Retail, The Hershey Company at the ETCFO event aptly describe the role of NextGen CFO: "The 4 E's of leadership: Enrich with words, Empower peers, Elevate as leaders, and always Empathise, put yourself in others' shoes."

Well, we had more than 30 CFOs. and it's difficult for me to quote every one here. Importantly, we also crafted a special session on ''Her Idea of a CFO" where we had Tanushree Bargodia and Niranjani C discussing various layers of how we should increase the number of CFOs and women leadership. We will write in detail on this very soon.

As usual, I am also adding here the top five in-depth articles/copies that we published this week. Trust, you will find them meaningful.

1.Crompton Greaves Consumer Electricals aims to double business in 5 years, to focus on premiumisation in fans, says CFO Kaleeswaran Arunachalam
2.IIFL Home Finance to register Rs 1 trillion AUM in next 3-4 years: Gaurav Seth, CFO
3.Growth Projections: How ICRA, Morgan Stanley, and Moody’s see the road ahead?
4.Magellanic Cloud CFO Sanjay Chauhan foresees Rs 50,000 crore drone market in India over next 5 Years
5.CBDT recovers Rs 35,500 crore in tax dues in H1, aims for Rs 1 lakh crore by year-end

Happy Reading,

Amol Dethe
Editor
ETCFO

(Editor's note is a column written by Amol Dethe, Editor, ET CFO. Click here to read more of his articles exploring several buzzing topics)

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