the cfo contemporary role
DESCRIPTION
The Chief Financial Officer ( CFO ) contemporary role which has more with emphasis on strategic planning and risk managementTRANSCRIPT
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The CFO’s Contemporary Role
Prepared by :Samir Derbas
Jan 31st ,2014
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Chief financial officer (CFO )
• Finance Director, a common title in the UK• The chief financial officer (CFO) is a
corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management.
• Most CFOs of large companies have finance qualifications such as an MBA or come from an accounting background.
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What does a CFO do? Controllership dutiespresenting and reporting accurate and timely historical financial information of the company ( History )
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What does a CFO do? Treasury dutiesdecide how to invest the company's money, taking into consideration risk and liquidity , oversees the capital structure of the company, determining the best mix of debt, equity and internal financing ( Present )
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What does a CFO do? Economic strategy and forecastingidentify and report what areas of a company are most efficient and how the company can capitalize on this information; For example, the CFO of an auto manufacturer must be able to pinpoint which models are making the most money for the company and how this information can best be used to improve the company in the future ( Future )
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Challenging Business Environment
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•"How you allocate your time is going to vary year to year, based on the business challenges that
your organization is facing."
Bill Douglas, Coca-Cola Enterprises
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Changing role of the CFO
•Traditionally being viewed as a financial gatekeeper
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Changing role of the CFO CEO & CFO working together
•CFO has expanded and evolved to a strategic partner and advisor to the CEO, developing strategy, guiding key business initiatives
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Changing role of the CFO - Strategy
• Developing and defining the overall strategy for the organization• Representing the organization’s progress
on strategic goals to external stakeholders
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Changing role of the CFO
•The CFO remains an objective voice on financial performance but contributes to operational decision-making as well.
•CFOs manage or materially support information technology, investor relations, real estate and strategic M&A — and some are involved in commercial activities.
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Changing role of the CFO•make collaborative rather than
unilateral decisions• big-picture thinker, rather than detail-
oriented•outspoken rather than reserved• prefer to delegate rather than be
hands-on•emphasize what gets done rather than
how things are done
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Changing role of the CFO
•The CFO is a Leader “Management is doing things right; leadership is doing the right things”
Peter Drucker •ensuring the integrity of fiscal data and
modeling transparency and accountability
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Changing role of the CFO
•fundamental role in the development and critique of strategic choices…due diligence
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Changing role of the CFO
•key player in stakeholder education and communication
•supports the CEO directly and provides timely advice to the BoD
• part of governance as the (CEO)•Develop commercial insight; consider
stepping outside finance
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Changing role of the CFO•Developing a strong team is important,
cultivating the skills of the next generation of financial leaders
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CFO role; Risk Management•“Risk Intelligent CFO – Converting Risk to
Opportunity• CFOs are often best placed within the
executive group to identify and raise those risks or challenge business assumptions at the Executive or Board table
• C-suite ( CEO, COO, CRO..) are often so focused on driving growth, economic stability and short-term results that the causes of potential failure are too easily overlooked.
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CFO role; Risk Management•CFOs need to be aware of the limitations
of traditional corporate risk management and play a vital role in creating a risk intelligent organisation.
• Executives too often assume that the world or environment remains unchanged and that this year’s strategic risks are simply the same as last years.
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•"As CFO, I’m in a unique position within the organization, at the absolute center of the universe. The only other executive besides me that has that same presence at the center is the CEO.
◦ - Bruce Besanko, OfficeMax
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10 Characteristics of a Successful CFO
1. Financial Foresight: anticipate financial management issues
2.Excellent Communication Skills: communicate the financial health of the company to all stakeholders
3.Confidence: The ability to make decisions on behalf of the company with confidence and assertiveness
4.Vision and Foresight: in tune with his market, enabling him to create and implement business plans
5. Accounting & Financial Competence
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10 Characteristics of a Successful CFO
6. Deep Understanding of Business7. Integrity and Ethical Standards8. Perspective on Risk: The willingness to try new
things and take calculated risks to grow the business and improve the financial position of the company.
9. Result Oriented Nature: set goals that are specific, measurable, achievable, relevant and traceable is a good trait
10.Leadership skills: emotional intelligence; self awareness, self regulation, motivation, empathy and social skills.
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Risk and Control
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The End
Thank you
Samir Derbas