Utility Week

14 | 18TH - 24TH JANUARY 2019 | UTILITY WEEK Finance & Investment CFO Insight report L ike most things in the utility sector the role of the chief financial officer (CFO) is in a state of flux. As the energy and water sectors decarbonise, localise and embrace new technologies, so the job of the CFO is evolving from a traditional guardian of company value to one that plays a bigger role in strategy, planning and positioning of the business with new ideas and offshoots to boost its value – both financially and, increasingly, socially. Managing the company's finances, including financial planning and credit con- trol, managing risk and financial reporting is still at the heart of the CFO's job description. But the boundaries of today's incumbents are not so narrowly defined, and as the role expands so too will the skills and knowledge required. In some organisations finance and regulation functions are already under the same umbrella; in others the IT department is subordinate to finance, reflecting perhaps the ever-growing cost of cyber-security and investment in digitalisation and tech-led cus- tomer engagement. CFOs must continue to impress the City, but as we discuss in the following sections, the balance of fiduciary stewardship will be increasingly balanced with a need for an eye on the social good, with financial manoeu- vres that play to customer trust, public ben- efit and the sustainability agenda. There is a key role for the CFO in longer- term transformations, such as the roll out of electric vehicles (EVs) and the move to the smart grid and a myriad of renewables, as they work with operations teams to plan new investment and where and how to maximise returns. In the energy sector, where decen- tralisation is the direction of travel, barriers to entry are also being broken down and business models disrupted in ways that have yet to become fully apparent. In the immediate term the day job is also becoming ever more of an exercise in finan- cial agility as utility firms begin to feel the regulatory pincers at work – pushing perfor- mance on the one side and financial returns on the other. There's also unpredictable political factors at play, including the spec- tre of a no-deal Brexit and renationalisation. Why today's CFO needs to adapt to thrive How do you keep shareholders happy and financial plates spinning at a time of huge technological change, tougher regulation and political uncertainty? Utility Week in association with Oracle interviewed CFOs about their challenges and changing role.

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