The stereotype of a chief financial officer is someone who sits in their office all day crunching numbers, doing debits and credits. But in the past few years of economic uncertainty, increased geopolitical tension, and technology disruption, we’re seeing in real time the rise of the modern CFO.CFOs at leading companies discussed this dynamic with Diane Brady, executive editorial director of Fortune Live Media, during Fortune‘s Most Powerful Women Summit in California on Tuesday.“I think the modern CFO is really an evolving role,” said Maria Ferraro, the CFO and chief inclusion and diversity officer at Siemens Energy. “Look at the markets, the customers, and what’s happening around us. It’s actually not acceptable for us to just sit in our offices and come out at month end and quarter end. We’re really at the core of what’s happening in the organizations.” Ferraro said her role as CFO is enhanced by the holistic understanding of how inclusion and diversity drive the business.Finance chiefs are tasked with having a complete understanding of the entire business and how it creates value, according to MIT. Not only are they now central to creating a company’s strategy, they must also communicate it effectively to external and internal stakeholders. Emily Reuter, CFO of the grocery-delivery business Instacart, said since the company went public last year, it’s been essential to communicate Instacart’s story and strategy to employees. “I spent a lot of time internally on what I call an internal financial education on Instacart,” Reuter said. She summed it up as “demystifying finance for folks that are non-finance people.” Enhanced communication is also essential for cross-functional C-suite partners, Reuter said. “Less of what is the P&L? But more of what’s the context of why we’re making these decisions?” she said. That’s a shift from 20 years ago when a CFO may have said to peers, “‘Hey, I’m gonna throw my budget over the wall; good luck and figure it out,’” she added.Mandy Fields, CFO at the cosmetics and skincare company e.l.f. Beauty, agreed the role of the CFO is very different than it used to be. “I think the financial foundation is just table stakes; that’s just the cost of entry,” Fields said.It’s become a highly visible role where you’re representing the company, she said. “And you almost have to be a proxy, at some moments, for the CEO,” Fields said. “I spent a lot of time making sure I know what’s going on in the business.” And that also includes collaboration with Kory Marchisotto, the chief marketing officer, Fields said. The company made the decision five and a half years ago to invest more in its marketing and digital efforts.“We only used to spend about 7% of our net sales on marketing and digital, and today, we spend about 25% of net sales,” Fields explained. “That type of investment requires a ton of communication and bringing people along in that journey.” Elena Gomez, CFO at Toast, a cloud-based restaurant management software company, brought up how finance chiefs are also at the center of technology investments. “I’ve spent a lot of time in the last six months thinking about the impact AI will have on our business,” Gomez said.At a recent CFO dinner Gomez attended, an exec said in the next three years, although their businesses will grow, they’ll most likely only have 80% of the headcount they have today, she recalled. “I have reflected on that at least 10 times since that dinner,” Gomez said. That is something that not only affects CFOs in terms of how they think about capital allocation, but it is something that will impact all C-suite roles. “The fabric of companies may change,” she said.
