Looking back for a glimpse ahead: A past winner’s take on the evolving role of CFOs

What does the chief financial officer of the future look like?

As a long-time executive in the energy and agricultural industries and Canada’s CFO of the Year in 2008, Bruce Waterman has plenty of perspective on what it takes to succeed and what the landscape for financial leaders looks like down the road.

As CFO of Agrium Inc. in 2008, Bruce was on the front lines as companies navigated the financial crisis. Since retiring in 2013, Waterman has kept his foot in the business world as a corporate director, including at Encana Corp. and Irving Oil Ltd.

His experiences have given him a window into the ways the CFO role has evolved and continues to shift as new skills and attributes come to the forefront. They include having a stronger hand in the business and operations and the need to be a skilled communicator in the face of rising expectations from external stakeholders.

“At Agrium, I was responsible for all communications, both internal and external,” says Bruce. “I think that may become a more common model in the future. A CFO who is not a good communicator is not a good CFO.”

The impact of the financial crisis

With the shifting roles comes the need for CFOs to have a deeper understanding of the organizations they support, an issue that came to the forefront during the financial crisis. CFOs played a crucial role in 2008, when Bruce was honoured as Canada’s CFO of the Year. Financial markets crashed and unemployment skyrocketed as companies struggled to survive.

Bruce Waterman receiving Canada’s CFO of the Year Award in 2008. View more photos

The crisis highlighted the need for CFOs to move beyond internal financial control structures—which came back into focus in the wake of the collapse of Enron Corp.—to do more to consider the impact of external events on a company’s ability to stay afloat.

“When I talked to a lot of CFOs in 2008, I was amazed at how many of them had borrowed short-term to invest long-term,” says Bruce, noting the problems that ultimately arose when funding sources dried up.

“I think CFOs now are a lot more focused on designing a capital structure that is appropriate not only for their company but also for their industry.”

In the case of Agrium, it was in a more enviable position in 2008, which meant the company had sufficient liquidity to take advantage of opportunities in the commodity cycle. For CFOs, the crisis represented an opportunity for them to have a bigger role in a company’s strategy and operations. “It’s all about taking advantage of opportunities and setting yourself up so you’re in a position to take those risks—logical risks—when the opportunities arise,” says Bruce.

The keys to success

The six criteria for Canada’s CFO of the Year Award seek to capture the dynamic and shifting focus of financial leaders—beyond their role of balancing the books. Since 2008, Bruce has remained involved with the award, serving as chair of the selection committee from 2012 until this current year. His involvement has given him even more insight into what it takes to succeed.

So what sets the CFO of the Year apart from other applicants?

• Driving the company’s success through outstanding execution:
  “You have to make sure the CFO understands the business and is integral to it,” says Bruce.

• Recognizing and nurturing the success of others:
  “That means they’re developing great people, and that’s a real skill. You have to be good at what you’re doing to be able to do that,” he says, emphasizing the two most heavily weighted criteria: inspirational leadership and mentoring and development.

According to Bruce, the quality of the nominations has continued to rise. “[The nominees] just seem to get better and better. They’re broader, they’re involved in their community, and they’re not only mentoring their own staff—they’re mentoring in their communities and really developing people across the organization.”

Boosting the profile

Bruce remains committed to the award and the legacy it provides to the community of winners, finalists and selection committee members, as well as to CFOs across Canada. A member of the selection committee for 2019, he believes the award adds credibility to the CFO role and provides examples of how other financial leaders should operate. While some believe the role is to eliminate risks, Bruce emphasizes the CFO’s responsibility to help companies understand which risks to take.

Adding another element to this shifting role is the speed of information and communications. As information flows become instantaneous, crises can happen even faster than before, an issue Bruce believes the coming generation of CFOs are in a better position to handle given their embrace of technology and flexible work environments.

The good news is that while the CFOs of the future will have a lot on their plate, Bruce believes they’ll have what it takes to help their companies manage the coming challenges and navigate potential crises.

“I think that the new generation is much more qualified to do that.”