Survey: CEOs are asking CFOs to focus on cost reduction.

Fifty-four percent of chief financial officers (CFOs) indicated that their chief executive officers (CEOs) are putting pressure on cost reduction, focus on working capital efficiency, and risk management. While 40% said their CEOs want them to focus on strategy, performance management, revenue growth, and investment, that’s according to a new report from Deloitte.

“External challenges like inflation, high-interest rates, and geopolitical uncertainties seem to be impacting CFOs’ assessments of macroeconomic conditions. We saw optimism tick upward last quarter, but presently, CFOs are expressing more caution and have a weaker appetite for taking greater risks.” Steve Gallucci, national managing partner of the U.S. CFO Program at Deloitte, said in the report.

The Deloitte CFO Signals survey for the second quarter of 2023 was conducted between May 1 and 15, 2023. A total of 122 CFOs participated in this survey and gathered responses from chief financial officers (CFOs), where the vast majority are from companies with more than $1 billion in annual revenue.

– Thirty-four percent of CFOs rated the current North American economy favorably.
– Economic/financial market risks (81%), geopolitical risks (57%), and cyber risks (56%) topped CFOs’ list of most worrisome external concerns.

CFO sentiment towards current economic conditions rose in four of the five regions covered in Deloitte’s latest CFO Signals survey, with the exception being North America where 34% of CFOs rated the current economy as good or very good, down from 40% in Q1 of 2023.

However, across all five economic regions, CFOs are pessimistic about economic conditions improving in a year. The proportion of CFOs who indicated conditions in North America will improve in a year dropped to 34% from last quarter’s 54%.

Looking externally, more than three-quarters (81%) of CFOs ranked economic/financial market risks as their organisations’ top external risk. Geopolitical risk (57%) ranked second, despite consistently topping CFOs’ list of external concerns in several previous surveys.

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