CHIEF VALUE OFFICER – THE IMPORTANT EVOLUTION OF THE CFO | 1. WHAT DO WE MEAN BY ‘VALUE’
1.8 The chief value officer today A CFO noted that, ‘the CVO description had been batted around for many years and you think if it is…heading in that direction, you want to…be ahead of the game’. A search of a number of online recruitment-agency job boards 3 for CVOs produces few roles with this title. Instead, these searches tend to identify roles such as the ‘chief operating officer’, ‘chief procurement officer’, ‘chief technology officer’ and ‘chief financial officer’ as their nearest matches. The inference therefore is that while the term exists as a discussion point in the development of a C-suite role, there are few actual roles that currently exist with this specific title. A similar search of job titles in LinkedIn (conducted 1 April 2023) produced only a select few individuals who used this job title to identify themselves. Such an analysis does not necessarily mean that the organisations are not considering the role and it may be expected to appear in roles soon. What is relevant is that, as organisations develop, value is being considered as an alternative aspect of many existing roles.
1.9 A consistent view of value? The discussion of value in this section has been at a conceptual level. The CFOs in several of the roundtables discussed whether it was appropriate to have a conceptual framework for value or whether more substantial guidance was needed. As has been commented, for most of the roundtable participants, the concept of value was highly contextual to the organisation, its economic circumstances, its sector and its size. For that reason, any guidance on value must be capable of embracing this degree of variation. Yet, there is also a view that, as the term is increasingly being used, there needs to be some level of consistency in what is meant by it. Several participants argued that a ‘guiding principle’ should be established to give consistency at a high level while enabling flexibility of interpretation at a detailed level. A CFO from the public sector commented that for that sector the concept centred on value for money: how do public services serve their communities best? While at first glance this may appear to differ from the analysis of value provided above, it can also be interpreted as requiring a different definition of stakeholders, so the ‘value for money’ concept is embedded in the overall value concept. A CFO from Africa who has worked in both the commercial and not-for-profit sectors commented, ‘I tend to think that “value” is a very volatile [concept] because “value” for a profit-making organisation and “value” for [a] social enterprise means different things. Trying to come up with a definition that cuts across makes it difficult because you view value from a stakeholders’ perspective, at the end of the day’. If such a definition were to be in place it would help cement the role of the CFO in relation to value in organisations.
The changing CFO role – a perspective ‘The role is changing, and I have seen it in so many forums where they say … CFOs make the best CEOs [chief executive officers] because they have in mind what will the number look like? That is what the stakeholders want to have comfort in. ‘Even if my CEO spoke in a meeting, the chairman would look and ask me, do you agree…? [Agreement] coming from the CFO gives the comfort that somebody has looked at the mathematics behind all this storytelling and that [the CFO is] comfortable. ‘The role is evolving, and I think it is high time we start to move the CFO mindset away from just the financial reporting to see how we influence the numbers before they get to the trial balance. Because if you are looking at it from a ‘cake recipe’ [model] and every time I bake the cake [it] turns out [the same], unless I go back to change the recipe the outcome will always be constant. ‘Unless the CFO goes and changes the recipe of the cake and [is] not just waiting by the oven to get the cake out of the oven, the outcome is never going to change. We have to get involved in the day-to-day and I think that is where the CVO title becomes more appropriate. We [must] have the change in mindset to say it is not just about financial reporting, it is not just about finance-related roles, but you are able to influence so many strategic decisions that are of value to the organisation’. CFO based in Africa
AS ORGANISATIONS DEVELOP, VALUE IS BEING CONSIDERED AS AN ALTERNATIVE ASPECT OF MANY EXISTING ROLES.
3 A search was undertaken of job boards in the US, UK, Singapore and on various global sites on 1 April 2023.
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