How CFOs Can Lead During and After the COVID-19 Crisis

This article is a contributed piece by Kevin Dancey, CEO of the International Federation of Accountants (IFAC). The views expressed are solely those of the author.

The transformation of senior finance roles, including the CFO, is not a new topic. However, when the COVID-19 pandemic presented society and businesses with the most pressing challenges of the past century, this transformation gained an urgency almost no one could have foreseen.

For CFOs, the pandemic has meant shrinking balance sheets, rising risks, and strained supply chains, with human capital also under tension and pressure. According to a PwC survey,87% of CFOsare concerned that the pandemic will significantly impact their businesses, and 80% expect revenue or profits to decline that year.

SMEs bear an even heavier burden—one statistic showsthat one in five UK SMEs could go out of business. In the public sector, finance and accounting leaders are facing massive fiscal interventions that will have long-term effects on government finances.

In the post-pandemic era, resources will remain constrained, and the slow economic rebuild will require the right leadership. As senior executives, CFOs must seize the opportunity to lead their organizations on both the dimensions of short-term survival and long-term success.

Torespond to the current crisisand lead in the post-pandemic era, CFOs need to focus on three core areas.

Putting People First

A company's most valuable asset is its people. While short-term cash flow and profitability can be affected by external factors beyond control, the foundation of long-term value creation comes largely not from financial or manufacturing capital, but from human and social capital.

As the pandemic spread, it became clear that commuting to work posed health risks for many and created unacceptable public health hazards. Except for a very few industries, this meant the shutdown of shared office spaces. Remote work is a viable option for some, but not for everyone. The pandemic's impact on employment has been devastating.

In organizations where remote work is feasible, CFOs should address productivity threats by adapting to new ways of working. To support employees, they must understand their company's technological capabilities and quickly apply them (while seeking new ones) to sustain people and operations.

Safeguarding the physical and mental well-being of employees and contractors mustgo beyond contractual obligations, preserving jobs while also fostering productivity in a virtual work environment. As organizations embrace remote work and explore more effective ways of collaborating, traditional notions of productivity may evolve. Research shows that remote work may actuallylead to higher productivity。

CFOs and senior finance leaders have a responsibility to support employees, and doing so will also benefit them.

Delivering Trustworthy Information

In times of great uncertainty in daily life, the demand for reliable sources of information is extremely high. CFOs have the opportunity to demonstrate that their organizations are responsibly serving customers, employees, and shareholders, thereby protecting brand reputation in the process.

The most visible leaders in the pandemic response are often not the most trusted. In theEdelman Trust Barometercovering ten countries, respondents in eight of them believed that "my employer" was better prepared for the pandemic than "my country."

Companies need to show investors and customers their confidence and leadership amid great chaos. Building trust requires clear and effective communication, much of which should be forward-looking and directed at both internal and external stakeholders. CFOs are crucial in this process.

From Short-Term Survival to Long-Term Planning

CFOs must not only lead their companies through the crisis but also into the post-pandemic era. This necessarily requires short-term actions to keep the company running and ensure employee salaries. Cash flow, liquidity, and supply chains will be top priorities. But long-term value creation must always remain at the core of the agenda.

Shifting focus from balance sheet accounting to value creation accounting will be a key part of responding to this crisis. Beyond financial duties, CFOs also need to act as partners to various business functions within the organization. They need to understand and address the factors that determine the company's survival and future value creation, including talent, customers, supply chains, and cash flow.

In cross-functional collaboration, CFOs need a comprehensive understanding and full confidence in performance and results. They need todrive enterprise risk managementanddrive finance team transformationto meet business needs—whether in the post-pandemic world or in the decades to come.

For CFOs and senior finance leaders, by safeguarding the organization and its people, refining new ways of working, and identifying new opportunities to create value and positive social impact, they have the chance to deliver outcomes that go beyond mere crisis response.

COVID-19 is today's crisis, tomorrow's crisis, and will persist for months. Both lives and livelihoods are at stake. With demand plummeting across major sectors of the economy, disrupted supply chains, and dried-up liquidity, for many organizations, next week—let alone next quarter—is uncertain.

By focusing on talent, delivering clear messages to internal and external stakeholders, and driving long-term value creation and social impact, CFOs can lead their organizations through this difficult period.