Deloitte Top 200: How CFOs are planning for the unexpected

Tax Traders co-founder Nicola Taylor says CFOs are adopting more scenario-based planning. Photo / Supplied

Gone are the days of business leaders being confident their five-year forecasts will come to fruition.

With the past five years bringing about a pandemic, low interest rates and high growth, then inflation, high interest rates and low growth, leaders have had to be flexible and adapt.

This is the observation of Nicola Taylor, a co-founder of Tax Traders, which is sponsoring the chief financial officer (CFO) of the year category in the Deloitte Top 200 Awards.

This year’s finalists are Meridian Energy’s Mike Roan, Fisher & Paykel Healthcare’s Lyndal York, and NZME’s David Mackrell.

“Planning has become more complex,” Taylor said.

“CFOs are adopting a lot more scenario-based planning, they’re a lot more agile in their forecasting and risk management.”

The uncertain environment CFOs are operating in was emphasised by those recently interviewed for a Hunter Campbell “Mood of the CFO” survey (done in partnership with Tax Traders) having completely disparate economic outlooks.

Of the 173 CFOs surveyed, 36% believed the economy would decline over the next year, 23% saw it improving, 35% thought it would stay the same, and 6% said it was hard to know.

Even the Treasury is warning the Government’s books may keep being in worse shape than expected, because waning productivity is slowing economic growth.

“The only certainty in economic forecasting is uncertainty,” the Treasury’s chief economic adviser Dominick Stephens said in a speech last week.

Going back to the survey, the top concern identified by respondents was the economy’s performance.

Taylor said CFOs had heightened awareness of the various geopolitical tensions around the world.

She said maintaining good cyber security and diversifying supply chains were high priority for CFOs.

Looking at the political environment in New Zealand, she noted the two main things surveyed CFOs wanted to see were policies to addressing rising compliance costs and tax laws that simplify and streamline compliance.

While a quarter of respondents believed it didn’t matter who was in government, in terms of the impact on their businesses, 56% said National would have a “somewhat positive” impact on their businesses, and 7% said the same for Labour.

This said, 20% supported the introduction of a capital gains tax.

Taylor noted the CFOs surveyed were mindful of maintaining strong team cultures and attracting and retaining talent.

She recognised Gen Zs and Millennials were becoming increasingly prominent in the workplace; their approaches sometimes differing to those of their seniors.

“They simply won’t work somewhere that doesn’t align with their values,” she said.

Taylor was unconvinced younger employees would become less values-driven if rising unemployment forced them to take whatever jobs they could get.

She stressed that CFOs’ roles increasingly included being focused on people, rather than just the numbers.

The Deloitte Top 200 Awards will take place in Auckland on December 5.

Kirsty Godfrey-Billy of Xero won the CFO of the year award in 2023.

- This was produced in partnership with the Deloitte Top 200 Awards and sponsors