CFOs rank supply chain disruptions, the talent shortage and tax reform as higher risks than COVID-19, according to a recent survey from BDO USA.
The firm’s
The findings come as businesses have learned to adjust their operations to the pandemic, although they are still feeling constraints by supply chain disruptions and labor shortages, while remaining uncertain about any possible changes in tax policy.
“While the economy is recovering, that recovery is uneven and highly correlated with company size and sector,” said the report. “Looking across all sectors, only 38% of businesses are currently experiencing strong growth … That’s significantly lower than predicted: 62% of CFOs polled in our 2021 survey believed their business would be thriving by this time. But with the sole exception of the health care sector, less than half of respondents in every industry described their business as thriving currently. Every industry — including health care — underperformed relative to last year’s expectations.”
The survey also looked at the growing prevalence of environmental, social and governance issues, and found that nearly two-thirds (64%) of the CFOs polled believe implementing an ESG program will improve their long-term financial performance.
“ESG is the future of business,” said Christopher Tower, ESG strategy and services leader at BDO, in the report. “Those who don’t embrace it will be left behind. For CFOs used to making decisions based on a traditional cost-benefit analysis, this transition will require a significant mindset shift and a new decision-making framework. Strategies to create long-term value may mean making upfront investments today that will result in greater cost optimization and better financial performance tomorrow. Philosophically, most of us understand the advantages of adopting these sustainable practices — and the consequences of failure to do so. But we need to recondition ourselves to think this way.”
The talent shortage remains a top concern for CFOs amid the so-called "Great Resignation." A top workforce challenge cited by the CFOs was retaining key talent (42%), and 40% are responding by raising salaries
Mergers and acquisitions continue to be a popular way to add new talent, with 31% of CFOs planning to pursue M&A this year, up from 25% last year and 25% in the prior year. CFOs are also looking at new ways to transform their organizations, with more than half (53%) of CFOs polled pursuing digital transformation and 47% expanding their products or services.
