Recently, I hosted a panel discussion in Melbourne with three prominent CFOs in the Australian business community, I was joined by Matt Bekier (Tabcorp), Tony Connon (Australia Unity Limited) and Peter Meehan (Australia Post). The session was extremely well received with over 260 in attendance.
The aim of the panel discussion was to examine how CFOs dealt with the issues of the global economic downturn along with the lessons learnt and the processes which need to be put into place in order for their company to be well positioned for the upturn.
The panellists were also asked about the one piece of advice they had for CFO's of the future with the most notable observation being, 'I wouldn’t worry too much about accounting standards...the priority for CFOs is that they need to know their business inside-out.' While this observation is strong it gives some sense into the important role CFOs play to the overall success and operation of the business - it is no longer adequate to just oversee the financial viability of an organisation. CFOs of the future need to know all there is to know about their company in order for them to provide strategic, financial and non-financial guidance.
The Institute is dedicated to providing further resources and guidance in the future to the CFO audience. The guidance will form part of a '20 issue series' that the Institute will be launching next year. Stay tuned!
I am interested to hear what other people think about the skill set required of CFOs now and for the future. Your thoughts?
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My name is David King (CA 22247), and I have been a CA for 30 years, working in big audit and client services before moving into travel/international tour wholesaling in 1990. I have been a co-owner, director and financial manager of this business (40 staff)since 2001 and I've been through the rollercoaster ride of 911, Iraq, Bali bombings, etc and now the GFC.
ReplyDeleteWhen the 1st CFO of the Future report (based on the top 20 public company CFO's) came out about 6 or 7 years ago, I was surprised at how consistent the responses were to what I thought my strengths were as a Chartered Accountant in business. The consensus of the CFO responses was that the CFO's strengths were in the areas of strategic direction, mentoring of management, prudent control of cashflows and a stronger overview of the business than the CEO, due to an intimate understanding of the underlying figures by area/department.
Regarding the GFC, our business entered the red alert in October 2008 when every overseas supplier wanted to be paid yesterday and the AUD/USD had dropped from 0.83 to 0.60.
I have made a few comments below about how I tackled the GFC, which may be food for thought for others.
Because of my intimate knowledge of the business I was able to keep my co-directors calm and keep a smile on for the staff (they do watch)by setting clear guidelines in late October: a) Cash is king - check all forward commitments and ensure all bills can be paid. b)Cut costs (mainly wages) c)Do monthly reforecasting to ensure that you have up to date information on future income, costs and commitments d) Talk to the bankers about availability of cash should extra be needed e)Keep auditors and regulators informed f) Move with the market - in our case we knew that travellers would be looking for cheaper product and we looked for hotel specials in Thailand, and Bali, and we established a new product to Fiji when Pacific Blue announced new flights to this destination. As I knew our finances intimately, I was able to work with our marketing team to get the specials out - as with SARS in 2003/4, we spent more on marketing/advertising than in a normal year.
We are now coming out the other end of a terrible year, but due to the clear direction provided and proper due diligence on an ongoing basis, I look back at the last year as a success.
I would like to see CFO's concentrate more on what their strenghts are, which means strong and positive financial leadership, mentoring and providing strategic direction.
I hope that others agree with me.
It's interesting to see David's comment about CAs as CFOs focussing on their core strengths. One of the things that has struck me here in Perth talking to CA CFOs is the huge range of other things in their role: risk management (understandable), IT management/oversight, OSH, shareholder relations and communication, formal ASIC and ASX governance, and often acting CEO. We even saw, during the oil rig fire in the Timor Sea, the CFO as spokesman (a task I thought he did well).
ReplyDeleteI also note the clear pathway from CFO to CEO and the role of the CFO as a training ground.
So, what is the role of the CFO and where are the boundaries of financial management?