CFOs take larger role in corporate strategy as AI pressure rises

Corporate strategy is shifting closer to the finance function, according to McKinsey, putting CFOs deeper into decisions about growth, technology spending and investor messaging. The change matters because finance chiefs are being asked to help set direction at a time when competition is moving faster and AI costs remain hard to measure.

Andy West, a senior partner at McKinsey and global co-leader of its Strategy and Corporate Finance practice, told Fortune that the firm saw the shift at its 24th annual Global CFO Forum. The event brought together about 100 CFOs from more than 30 countries, representing some of the world’s largest organizations, according to Fortune.

West said he asked attendees whether the strategy function now reports to them. About two-thirds raised their hands, compared with less than one-third who would have done so five years earlier, he told Fortune.

The shift is about more than reporting lines, according to West. He said CFOs are becoming more central to decisions shaped by changing rivals, macroeconomic strain, geopolitical risk and technology disruption.

Competition is forcing faster decisions

McKinsey tracks a metric it calls the “shuffle rate,” which measures how often companies gain or lose market share within their industries, West told Fortune. He said that rate has climbed by about 50% across industries since the mid-1990s, showing quicker movement between market winners and laggards.

That pace is pushing finance leaders into work once more often associated with CEOs or heads of strategy, according to Fortune’s account of West’s comments. CFOs are taking bigger roles in capital allocation, long-term investment choices and communication with investors.

West said CFOs at the forum still sounded confident about their companies and about the private sector’s ability to support long-term economic growth. He also said growth has become harder, competitive advantages are wearing down faster and strategy is getting more difficult to carry out.

AI moves from tests to companywide change

Artificial intelligence is adding to the CFO’s expanded brief, West told Fortune. He said finance leaders had spent recent years discussing AI, but the conversation has shifted from experimentation to broad operating change across companies.

West said CFOs are now expected to measure AI’s effect on business performance, including areas such as customer operations and forecasting. He told Fortune that some finance teams are using AI early in their own departments to improve forecasts, analytics and decision-making.

Companies have not settled on a single way to judge AI investments, according to West. He said businesses are weighing factors including long-term token costs, infrastructure needs, vendor dependence, capital allocation and whether to use more than one AI provider.

West told Fortune that the economics of AI vary widely depending on a company’s industry, how central AI is to its business and how aggressively leaders want to pursue it. That leaves CFOs responsible for comparing uncertain costs with possible operating gains.

Talent questions remain

West said talent remains a major issue as companies adopt AI, but he identified organizational change as the larger obstacle. He told Fortune that companies are finding the value of AI comes from changing how work gets done, rather than removing isolated tasks.

That places CFOs in a broader management role, according to West. As AI reshapes operating models and capital demands, finance chiefs are being pulled into choices that affect both current performance and longer-term strategy.

West described the moment as an unusually active period for CFOs, telling Fortune they have more tools to affect company performance than before. His comments suggest the finance office is becoming a key venue for decisions that determine where companies place their next bets.

This story draws on original reporting from Fortune.