The Morning Ledger: CFOs Aim to Reconcile Strong Economic Data, Weary Consumers
Good morning.?Chief financial officers are looking to square a strong U.S. economy with consumer sentiment showing signs of strain—and trying to determine whether it signals potential risks ahead.
Speaking Wednesday at The Wall Street Journal’s annual CFO Network Summit, CFOs from a range of industries, along with advisers and former policymakers, discussed the effect of inflation and higher interest rates on consumer spending. CFOs also weighed in on new climate disclosure rules adopted by the Securities and Exchange Commission, opportunities presented by generative artificial intelligence, and how companies are adjusting to higher interest rates.
American consumers are spending briskly, overall inflation has cooled and unemployment has been below 4% for 24 consecutive months, the longest such stretch since the 1960s. But while data paint a picture of a strong economy, consumers are anxious, as prices for everything ranging from gas to groceries have squeezed household budgets.
“Forget about the fact that core inflation is getting to a better place,” said Paul Ryan, vice chairman of public relations firm Teneo and a former U.S. House speaker. “That is not how a voter or a consumer sees things.”
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CFOs' Expanded Role Fostering Aspirations to CEO Job: Study
As CFOs navigated the shifts during the pandemic, they have accumulated the skills, and for some, new aspirations, for the top CEO role.
The Covid crisis, higher interest rate environment and other recent challenges have sparked the rise of a more well-rounded finance chief, who has increasingly acquired expertise and core competencies beyond their finance role.
Some 82% of CFOs reported that they have added more responsibilities to their traditional mandate versus five years ago, according to Egon Zehnder , the global leadership advisory and executive search firm, in a new survey of 581 finance chiefs globally on the rise of the “super CFO,” who acquired and mastered new skills and who became more fluent on a wider range of topics and skills, including environmental, social and governance issues, M&A and overall corporate strategy.
Regarding the growing pipeline of CFOs landing the top CEO role, the survey found that 62% of respondents were “interested” in the chief executive role, and as can be expected, of those with such aspirations, 71% said they are “ready” for the role.
“As companies and as boards look at CEO succession, increasingly they may want to consider the CFO as a potential candidate for succession,” said Arun Dhingra , a senior partner and global head of Egon Zehnder' s CFO and audit chair practice. “The most important thing a board does is appointing the CEO, so as part of their duty to look at internal succession candidates, they should increasingly consider the CFO.”
Peter Crist , chairman of executive recruiter Crist Kolder Associates, also noted that rising to the CEO role isn’t for everyone, and many CFOs don’t aspire to the role.
“It’s important to note that not every CFO wants to be the CEO, and some would prefer to team or partner with a great CEO, and one plus one is three. They just want growth, and an expanded remit.”
—Walden Siew
About Us
The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO. The WSJ CFO Journal team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.
You can reach us by replying to any newsletter, or email Walden at [email protected].