View
217
Download
0
Tags:
Embed Size (px)
Citation preview
Chief Financial Officer - CFO
Brings Logic & Order
to what would otherwise be Chaos
Functional Evolution of Finance
Cash
Language of Finance
Business Analysis
Business Planning
Business Partner
The Role of Finance Company Variables
• Type and Size of Business
• Financial Health of Business
• Personalities and Backgrounds of Senior
Management and Directors
• Speed of Change
The Minimal Roles of Finance Demanded & Unavoidable
1st – Administration of Money for Company
2nd – Provide the Language of Finance as a Common Denominator
(Minimal Role of CFO)
The Larger Role of Finance
• Applying Financial Skills to the Broader Context of the Total Business…
Current & Future
as a
Business Partner to General Management
Mission of Finance
1. To Provide:
a. Value to Customers
b. Appropriate Return to Investors
c. Responsible Environment for Employees and
Communities
Bakane, CFO
Mission of Finance
2. Operate in Partnership across All Units and
Functions to Further Corporate Goals
3. Add Perspective and Match the
Organization’s Needs with Capital Sources
Evolution in CFO Requirements
Evolution in CFO Requirements
Accounting Details Specialists
Translator CFO of (not necessarily CPA’s)
Specialists (accounting)
for MBA’s(Senior Management)
Student
Start-Up
Multi-Billion $ Business
CFO Mgt. Principles are the Same!
• Old or New Economy
• Small or Large
• Domestic or Multinational
• Good or Bad Company
External Demands
Growing Amount of Required
Financial Reporting (Auditing)
By Government Agencies (IRS,
SEC)
and Investing Public (Analysts)
Strong Technical Knowledge
Need to Directly Control the Information Released
CEO’s Increasingly Turning to CFO’s to:
• Influence Decision Making
• Craft Internal and External Strategies
• Communicate to and Help Manage the Board
• Manage other Functions
CEO’s Increasingly Turning to CFO’s to:
• Help Manage Operating Companies
• Help Corporate Financial Literacy
• Add Economic Value
• Help Manage the CEO
CFO Company Variables
• Health of Company
• Personalities and Backgrounds
of Senior Executives & Directors
• Type and Complexity of Company
• Speed of Change
CFO’s Intimate Interactions
• Board of Directors
• Audit Committee
• Compensation Committee
• Executive Committee
Base Organization
C o rp o rateA u d it
C o rp o rateA cco u n tin g
M an agem en tR ep o rtin g
&B u sin ess A n alys is
In ves to rR elatio n s
Treasu rer
C F O
Expanded Organization
C o rp o rateA u d it
C o rp o rateA cco u n tin g
M an agem en tR ep o rtin g
&B u sin ess A n alys is
In ves to rR elatio n s
Treasu rer
C F O
SharedServices
ProcurementSCM
InformationTechnology
StrategicBusiness
Unit,CFO’s
StrategicPlanning
MergersAcquisitionsDivestitures
CEO
Audit Committee
CFO
COO
Board of Directors
OPCP - Presidents
Consultants
Corp. Staff
Analysts
Share Holders
Major Suppliers
Business Partners
Employees
Finance Employees
Civic Leaders
Admin.
CFO
Immense Time Consumption
Setting Strategies
• Corporate
• Financial
• Personnel
Tricon – CFO Strategies: Prioritize
1. Reduce Debt/Re-franchise
– Get to Investment Grade
2. Staff the H.Q.
3. G&A Reductions Shared Services
4. Standardize & Integrate Systems for Y2K
5. Create a System Wide Co-Op
Setting Financial Policies
• Internal Control
• Accounting Policies
• Measurement Standards/Benefits
Setting Financial Policies
• Financial Administration of Business
– Annual and Long Range Plans
– Evaluation of Major Expenditures
– Evaluation of Economic Trends
– Capital Structure
Setting Personnel Policies
• Hiring, Training, and Development of the
Finance Function
• Structure and Staffing
CFO’s People Focus
• Structure
• the “Best” Key Personnel
• Working Relationships
• Communications
• Operating Procedures
Corporate Skill Curve
Technical
Mgmt.
Leadership/PoliticalMgmt.
Small/Low
Size/Complexity of Firm
Large/High
Ski
ll R
equi
rem
ents
Functional Skill Curve
Entry
Middle
Sr. Mgmt.
TechnicalSkills
ManagerialSkills
Multiple Tasks
Political &Leadership
Skills
CFO Career Grid
Corporate
CostAcct.
Planning,Reporting,Investor
Relations
BusinessAnalysis,Treasury
StrategicPlanning
Acct.AuditTax
Entry
Manager
New Co.’sInternationalCrossfunctional
New Areas
CFO as a Business Partner
- Assistant General Manager
Ethics Leadership
• Honesty• Promise Keeping• Fairness• Respect for Others• Comparison
(Social Commitment)• Integrity
• Teamwork & Trust• Diversity• Recognition• Ethical Management
Practice• Communications• Empowerment
The CFO
CFO Dilemma(s)
• Conflict of Interests
• Credibility
• Integrity
Becoming the CFO
The Last Hurdle
To
CFO
Lessons Learned – C.F.O.
• Importance of Your Team
• Functional Confidant – OM, Kennedy; YUM, Knopf
• The Bigger the Ego, the More Time you Need
to Manage it
• Succession makes everyone Crazy
L.L. – C.F.O. II
• Corporate Culture is Important to Understand
and Manage
– Almost all are Different
• Do a Couple of Changes Well.
vs.
Lots of Change with little accomplishment.