News for Nonprofits
A broader skill set will be required for future CFOs
A new report from the Association of Chartered Certified Accountants and the Institute of Management Accountants predicts which capabilities organizations will value in their CFOs over the next 10 to 15 years. The Future pathways to finance leadership 2013 study, which surveyed more than 750 CFOs and other top financial executives, found that experience in financial management and accounting won’t be enough. Effective CFOs also will need:
- Deep business experience and the ability to form and execute organizational strategies,
- Expertise with financial analytics, including knowing how to correlate, extrapolate and interpret data to make sound financial predictions,
- Experience managing traditional risks — including threats involving the economy, cash flow and regulatory compliance — as well as emerging dangers such as cyber threats,
- Deal-making skills and technical expertise in structuring mergers and acquisitions,
- A focus on customers and the capability to form relationships that extend beyond the organization’s executive director to the senior management team and board of directors, and
- An understanding of emerging technologies, such as cloud computing, plug-and play devices, real-time information and robotic software, that can possibly increase automation and improve workflow among finance team members.
Overall, CFO management skills that will matter in the years to come include leadership (cited by 65% of respondents), communication (60%), strategic thinking (53%) and change management (24%). In the nonprofit environment, communication will likely continue to be a key to success. The ability to interpret financial complexities for all stakeholders in nonfinancial language, along with the willingness to adopt new technologies, also will be valuable. Depending on your nonprofit’s size and complexity, your CFO may not require all of the skills mentioned above. But consider such traits the next time you fill a CFO vacancy or plan training opportunities for your current CFO.
Trouble reported at some national insurance co-ops
Some of the nonprofit insurance cooperatives created to help implement the Affordable Care Act are reported to be in financial trouble, even before the new national health care program gets off the ground. According to an Oct. 23 article in the Washington Post, one co-op has closed, another two are ailing and at least eight more have been diagnosed with financial problems via internal government reports and a federal audit. The Post attributes the dilemma partly to “onerous” federal restrictions and insufficient funding. The co-op in your nonprofit’s designated region may not experience such problems. But it makes sense to keep an eye on its viability.