Embracing the Future

With the retail CFO’s role evolving so quickly in the last few years, what changes will the future bring? Look for CFOs to be hired from outside the company, oversee more divisions and spend significant time overseas in an increasingly global retail world.



The finance function, of course, will continue to be critical, especially for public companies.



Also the CFO role may encroach further on operations, particularly in an era of consolidation — store closures necessitated by mergers likely will fall under the domain of the CFO. And executives who may not report to the CFO now, such as the chief information officer, could do so as data security grows as a concern.



As more U.S. retailers look overseas for continued growth, a CFO must become more familiar with international customs, financing and regulations, as well as local companies that provide such services. Also, the increasing complexity may lead to hiring CFOs from other industries, said Ellen Williams, senior client partner in Korn Ferry’s financial officer practice, Stamford, Connecticut, citing a recent study.



“Retail ranks second [among industries] in the number of CFOs hired from the outside,” she said. “In a perfect world, the CFO will be a strategic business person, not someone who’s spent their life in retail, with global experience, either having lived overseas or at least worked with a company that has [that] experience.”



Moving forward, the involvement of the CFO in defining and executing an overall strategy will continue to increase, according to Alison Paul, vice chairman and U.S. retail and distribution leader, Deloitte LLP.



“They will also continue to change organizational behavior by partnering with other executives and senior management to achieve their financial and strategic objectives,” she said. “In addition, with security and privacy being top of mind for many retailers, CFOs will likely continue to shift their approach from pursuing opportunities to more actively managing risk.”