Regulatory Concerns Ease For The World’s CFOs

Chief Financial Officers (CFOs) have more on their plates than ever before. Financial management and strategy is now only part of the job description, which has come to include guiding their organizations’ tech adoption, cybersecurity efforts and growth strategy as well.

Amid these changes is a world of regulatory shifts, from tax reform in the U.S. to financial reform in China and Brexit in the U.K.

PYMNTS takes a look at the latest research on CFOs around the world and how they’re responding to regulatory pressures. Surprisingly, it seems, chief financial officers are feeling more confident — or, at least, less concerned with legislative changes — than they have been in the past.

—50 percent of North American CFOs believe large companies will benefit the most from tax reform, according to a new CNBC survey. Analysts noted the “wide margin” over any other group that may benefit from new tax laws, with the middle class the second-most commonly cited group that survey respondents said would gain the most, at 12.5 percent. Three-quarters of CFOs across North America told researchers that their companies supported at least one version of the GOP’s tax reform plans, reports said.

—33 percent of CFOs surveyed by AAFCPAs said their biggest challenge was limitations on talent and bandwidth, while 19 percent cited budget constraints as well as a lack of meaningful metrics. Regulatory issues were mentioned by only 5 percent of survey respondents, researchers found. According to AAFCPA, “sophisticated CFOs will continue to be propelled forward by the rapid pace of change in business and must seize opportunities presented by factors, such as Big Data, advanced and emerging technology and globalization.”

—34 percent of U.K. CFOs said the level of uncertainty their businesses face was high or very high, down from 43 percent in Q2, according to Deloitte’s Q3 2017 analysis. According to reports, it’s nearly half the number of CFOs that reported high or very high uncertainty immediately following the Brexit vote, suggesting companies in the U.K. may be feeling a bit more stable about leaving the European Union. Nearly a quarter told Deloitte that now was a good time for them to take risks on their balance sheets, an increase from Q2 levels.

—32 percent of European CFOs said they are more optimistic than pessimistic, according to Deloitte’s latest findings. In its Q3 2017 analysis, Deloitte noted that it’s the first time since Q1 2015 that CFOs were more optimistic about their financial prospects than they were pessimistic across all European countries. Regulatory concerns seemed to have diminished for CFOs across Europe with a reduction in political uncertainty for the quarter, the report found. In a statement, Deloitte U.K. Chief Economist for Northwest Europe, Ian Stewart, said the data suggests EU CFO optimism “rebounded” following the Brexit vote. “Despite Brexit uncertainties, a broadening global recovery has helped lift sentiment among CFOs,” he said.

—3 percent more Chinese CFOs reported they were less optimistic in Q3 2017 than they were in Q2, according to Deloitte. Fewer CFOs reported being more optimistic as well (21 percent versus 26 percent, respectively). Still, most CFOs in China said they have a positive economic outlook, Deloitte said, with the rapid pace of change in the business environment proving to be the largest source of pressure on the profession. Nearly a quarter (24 percent) cited detrimental government policy/regulation among their top three regulatory worries, making it the most commonly cited concern, surpassing economic turmoil and geopolitical issues.