Finance teams are falling behind their CFOs

The demands on the CFO have only gotten more complex over the years, and some CFOs are worried they and their teams are falling behind.

That’s according to EY’s Global DNA of the CFO survey, which drew on responses from more than 1,600 CFOs and senior finance leaders across 28 countries in February and March. The survey found that “leadership capabilities are not keeping up with the fast-changing demands of the CFO role.” More than a third (38%) of respondents said “they are evolving faster than their leadership teams across the wider finance function.”

“The capabilities of finance teams are not keeping pace with the fast-evolving demands of the CFO role. CFOs are increasingly expected to operate as strategic leaders who can shape value and guide investment decisions but their ability to do this effectively depends on the strengths of the wider team,” EY Global Strategy and Markets Leader Myles Corson said in a statement.

“Without the right skills, finance teams will struggle to influence high‑stakes decisions, and the ability of CFOs to truly impact organizational progress will be limited,” EY Organization and Workforce Transformation Leader Meg Paschall added. “There’s also a very real risk that, if leadership skills across finance functions do not advance fast enough, [the] future CFO talent pipeline won’t be as strong, placing the CFO role in jeopardy.”

More than half of the CFOs surveyed “call[ed] for accelerated leadership development. To avoid future capability gaps, organizations should implement structured pathways, create stretch roles, and embed sound succession planning,” according to the report.

AI readiness. CFOs are also “challenged in their efforts to transform” by their finance teams’ lack of new tech skills. Only a fifth (21%) of the respondents felt that “their finance function’s AI preparedness [was] leading or advanced, compared to other companies, and less than 15% believe[d] their teams to be highly adaptable, or confident, using new technologies including AI,” the report said.

“The survey findings highlight that finance functions are not yet ready to make the most of AI and other emerging technologies,” Paschall said. “Many organizations are still building the capabilities to produce and interpret insights and are not yet equipped to apply these insights to business-critical decisions. The question is not whether finance teams have access to technology but whether they have the mindset and skills to put it to good use.”

Adapt and convince. Changing that mindset requires a lot of effort. Appearing on a panel at the Baruch College Financial Reporting Conference on May 7, Denise Lucas, VP and assistant controller at IBM, said AI “is as much of an organizational change and change management effort as it is a technology effort. The technology may be new and continuously keeps evolving, but you know, to get people to adapt, you need trust, leadership behaviors, incentives, and really convince people that it’s going to make their work and the way they work better.”

At IBM, “the norm that we’re trying to create is, don’t use AI for AI’s sake and just check a box,” Lucas said. “Really think about, what is the problem you’re trying to solve, what is the business objective? And then it kind of comes back to my days in audit—what is the workflow that you’re looking at, and how can you make that better?”

In the EY survey, finance leaders “also report[ed] a number of hurdles when it comes to securing investment for AI;” 61% indicated data quality issues and “51% struggl[ed] to clearly explain the benefits.”