Deloitte's 18th Annual CFO Vision Conference: Tax and Long-term Entitlement Reform Top CFO Wish Lists, Investment Priorities lie in Technology, Innovation and Talent

Polling of more than 85 large company CFOs suggests cautious outlook remains despite improving economic numbers

Dec 22, 2014, 09:30 ET from Deloitte

NEW YORK, Dec. 22, 2014 /PRNewswire/ -- Chief financial officers see little hope for progress in Washington, D.C., following the mid-term elections, according to polling data obtained from large company CFOs attending Deloitte's 18th annual CFO Vision conference.

The conference, attended by 87 CFOs from some of America's largest organizations, addressed key CFO-centric topics, including the outlook for the U.S. and global economies, capital markets, the regulatory environment, cyber security, finance talent, technology and CFO-career drivers. Conference attendees also heard an address from Ben Bernanke, former chairman of the Federal Reserve; and Walter Isaacson, American writer and biographer.

Half of the attending CFOs (50 percent) polled identified long-term entitlement reform as the most pressing issue to be addressed in Washington. However, confidence in the ability of politicians to enact change was low. One-third of CFOs (33 percent) believed gridlock would remain the same or get worse, and 43 percent said that little or no meaningful legislation will be enacted. Overall, 83 percent of CFOs stated that the mid-term elections failed to improve their level of confidence in the government's ability to address pressing concerns.

The prospects for tax reform, in particular, were viewed as unlikely by CFOs, despite 28 percent identifying this as the most pressing issue. Only two percent of CFOs polled believed tax reform will be signed into law, compared to 41 percent who believed reform will not go beyond the discussion stage. The majority of CFOs (58 percent) thought tax reform will be introduced in Congress, but will fail to pass in either chamber or be vetoed by the president.

"Electoral change may have occurred in Washington, but CFOs remain skeptical about whether or not the legislative outlook has improved," said Sanford Cockrell III, national managing partner, Deloitte LLP and global leader of Deloitte's CFO Program. "Clearly there is a desire for reform of our tax system and in particular, long-term entitlements."

CFOs confirmed that their outlook remains focused on growth. The majority of CFOs (67 percent) will pursue targeted growth for their organization going forward, focusing heavily on a few specific opportunities. Attending CFOs were evenly split on the impact of monetary policy shifts on their plans. Half (50 percent) plan to continue to borrow cheaply now in anticipation of higher interest rates, while the remainder will slow investment spending in anticipation of slower growth.

Looking to the future, the CFOs cited innovation as both a key performance-driving factor and an area for increased investment in the short term.  Twenty-seven percent of CFOs cited the ability to innovate as the most important factor driving their organization's performance in the next five years.  This was second only to customer demand, which was mentioned by 30 percent of CFOs. Regarding current investment, CFOs cited technology (40 percent), innovation (26 percent) and talent (23 percent) as the three areas they are investing in most heavily now.    

Additional findings from the Deloitte CFO Vision Conference poll included:

  • CFOs still have work to do on cyber security: Nearly a quarter of CFOs polled (23 percent) stated that they are not confident their organization could handle a cybersecurity incident and 32 percent stated that their organization lacks a specific cyber incident response plan.
  • CFOs split on raising the minimum wage: Half of CFOs polled believed that an increase in the minimum wage will have negative impacts, leading to additional job losses in the economy. However, the remaining 50 percent felt it should be increased as it may likely boost consumer spending while having minimal impact on employment levels.
  • CFOs believe the low unemployment rate may be hiding risks: The majority of CFOs surveyed (56 percent) stated that October's positive job figures disguise the fact that the economy still faces serious risks. A further 28 percent stated that even with the positive figures, the economy lacks the pace of growth needed to meet the large number of discouraged workers.

About Deloitte's CFO Program
The CFO Program brings together a multidisciplinary team of Deloitte leaders and subject matter specialists to help CFOs stay ahead in the face of growing challenges and demands. The Program harnesses our organization's broad capabilities to deliver forward thinking and fresh insights for every stage of a CFO's career – helping CFOs manage the complexities of their roles, tackle their organization's most compelling challenges, and adapt to strategic shifts in the market. For more information about Deloitte's CFO Program, please contact uscfoprogram@deloitte.com or visit www.deloitte.com/us/thecfoprogram.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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