As highlighted in our recent commentary, leadership will be under close examination. The Chief Financial Officer has a key role to play as many organisations navigate their way out of the challenges posed by COVID-19.

Last year, there were 106 CFO appointments in the ASX. Interestingly – but not uncommon – a number of CFOs were appointed as CEOs, a trend more prominent in periods of slowdown. Others decided on early retirement, again a theme we feel will continue in 2021. The market for the early part of the calendar year is already busy with a large number of organisations undertaking CFO searches or succession planning processes as I pen this note.

The CFO market will be tight as the opportunity to introduce offshore talent will be limited due to the threats of ongoing COVID-19 relapses. Whilst we conduct global searches and identify the appropriate international candidates for each assignment, it will be highly unlikely that those based offshore will leave their country, family, friends and networks. Some may argue we have it safe here in Australia, so the timing is good to attract international candidates. I am sure some international executives will pursue the discussion; however, it will be less than usual. This, therefore, places the emphasis on the domestic market and will stimulate appointments of Divisional Finance Directors and Group Financial Controllers to become CFOs.

The United Kingdom and the United States have witnessed COVID-19 infection rates decline in line with their vaccination rollouts, whereas India has seen recent surges. Australia has managed to keep infection rates minimal as it moves forward with vaccination. Some countries are intending to open their borders for those that have received the necessary numbers of injections and vaccine passports are being developed. India is starting to see economic growth and UAE and Australia are experiencing as some analysts argue V-shaped recoveries. The UK and Hong Kong are taking time to show any form of recovery with unemployment rising in Hong Kong as it falls in Australia.

People are returning to offices and starting to question the arguments around the proposed “new normal” working lifestyle, noting productivity, team culture, innovation, sense of social engagement and contribution being different in the office environment to the home. Others are standing firm that the “new normal” is the long-term play and that we will not see a return to the office culture. It will be interesting to review this in two years; however, trends are indicating some movement back to the office.

What is poignant is that Australia has restored confidence, but at the same time an enormous opportunity is being lost. With no significant reform in tax and industrial relations policies being undertaken, there is a growing sentiment of indifferent leadership across the business and political landscapes. Whilst other countries position themselves as “open for business”, we arrive at band-aid solutions of cheap flights around the country. No doubt, this is a great move for a number of industries, but it isn’t enough. JobKeeper and JobSeeker have been terrific life support mechanisms and now that JobKeeper has run its course, we have the opportunity to really get moving and seize the initiative. Instead, we limit ourselves to the same old red-taped, bureaucratic methodology of doing business. Last week saw the American Chamber of Commerce, PwC Australia and representatives of American companies with a combined market value of c. $4.5 trillion put forth the report “Attracting US Investors to Australia: The Opportunity Is Now”, highlighting this very point and bringing home the short-termism and lack of vision for the Australian economy. We rely on our natural resources industry and dig more holes as opposed to taking this moment in time to apply the necessary pressure and deliver some needed reform to business regulation in an effort to achieve international competitiveness and stimulate entrepreneurship. Business leadership has a role to play and senior finance executives who are managing today’s numbers are in a position to positively influence the future course of their businesses, and by extension, the Australian economy.

The CFO of last year who steadied the ship and took out cost will need to adapt to the demand for growing the business. Analysts and market stakeholders have moved on from the COVID-19 excuse for underperformance; many are of the belief that Australia has managed to avoid COVID-19’s full potential and that building blocks need to be in place to accelerate growth plans. As such, the CFO will be expected to be judicious in managing cost, but at the same time be capable of delivering the growth message, whether that be through organic or inorganic activities. With interest rates low and market confidence returning, there is a strong sense of activity in capital markets. Again, it is anticipated that the CFO will have the ability to engage and execute, as well as be the true business partner to the CEO. In the Finance Team, we are experiencing a strong demand for those with M&A and Risk capabilities and divisional finance heads with a strong understanding of technology; in particular, analytics and successful rollouts of digital transformation programmes.

Blenheim Partners’ Financial Officer Practice has built and will continue to gather intelligence on a pool of current and future CFOs. We have also invested heavily in our Technology and Digital Transformation Practice and continue to occupy a lead position promoting diversity in the Executive and Board as an essential characteristic of the most effective and successful teams. We believe diversity is a multivariate attribute that includes gender, ethnicity, experience, culture, language and other factors. Executive search is unsuitable for every role; however, on the Executive Leadership Team, it is an investment every successful organisation makes even if an internal candidate is selected.

Contact us