The Role if A Successful CFO
“Wisdom outweighs any wealth” said
the ancient Greek Playwright Sophocles (496BC -406 BC)
Finance
involves wealth creation and which is impossible without wisdom or knowledge.
In
the Corporate world CFO’s play a stellar role in wealth creation to all the
stakeholders and it’s only then he is considered successful.
Definition of CFO
The
Chief Financial Officer in the Corporate arena has a very important function as
he is responsible for handling all the finance and finance related matters.
As
the finance function interfaces with all the functions like
Production,Marketing,Procurement,Human Resources etc its considered as a
lifeline.
Financial success of any corporate is largely
dependent as how the CFO supports the day to day financial operations and is able to navigate astutely the various
challenges involved therein, as also the future risks.
He
wears multiple hats, as a custodian of finances ,adherence to ever changing
statutes and juggle acrobatically all the finance requirements.
CFO
is also considered a Key Management Personnel and part of the decision making
body.
Role of CFO
In
a business environment the CFO has a very crucial role to play, as he has to
bind all the stakeholders, towards a common goal, for the success of the
organization.
The
various stakeholders are the following:
1.
Management- for Accounting/Business Support and good governance
2.
Employees- for Payroll
3.
Vendors -for Servicing of Payments
4.
Customers- for Servicing of orders
5.
Bankers- for Servicing of Bank Credits/ transactions
6.
Statutory Agencies- for compliances
7.
Govt. Agencies- for various requirements
8.
Shareholders/Investors- for servicing their
finance expectations
As
evident from the above, the canvas is huge and so are the expectations, which
requires tact, knowledge and versatility.
SUCCESSFUL CFO STORY
There are no secrets to success. It
is the result of preparation, hard work and learning from failure.
A
successful CFO would require to have
almost a superhuman talent and skill set to meet the expectations of the
various stakeholders, as above.
In
doing so, he is expected to have certain core values, like personal integrity,
in depth knowledge, which needs to be
regularly updated and the competence to provide thought leadership, for smooth
running of the organization. In fact, he is expected to be an allrounder (to
use a cricketing term), who would provide a proactive support to the Company
Management Team.
Currently,
certain prominent Corporates, consider the CFO as a Chief Value Officer. This
was advocated by Deloitte in Denmark in a Danish business newspaper Borsen
sometime ago. This is largely due to the fact that conventional areas like
Accounting, Compliance, Reporting would happen almost effortlessly due to automation/digitalization.
Hence,
the CFO/CVO has to have a value focused approach, to create value by predictive
analytics and algorithms.
It
may be mentioned that the Professional Courses like
CA/CPA/CMA/ACCA/CIMA/CISA/FRM have all an important role to create that
superman with the requisite knowledge, core competence and values ingrained.
These courses have proved themselves globally and will continue to ignite the
minds of the young and old.
Conclusion
All
successful companies in the Fortune list will most certainly have CFOs who are
almost superhuman in their competence and knowledge. But at the same time, they
are super human beings as well.
There
is one such individual personally known to me, who is very publicity shy and
hence I am unable to name him.
In
him, I see all qualities that I have enumerated above.
Bob Shanks, CFO of Ford has summarized it well as
follows:
‘Operating
a global business in fast changing world,you have to be grounded realtime in an
external environment, have a complete transparency, be fact based, and working
with a great, collaborative team.”
Author
G.SRIKUMAR,FCA. INDEPENDENT DIRECTOR
Currently having a Sole Proprietorship Firm styled as G.SRIKUMAR & Co.
Currently with JRS & Co, Chartered Accountants, as Director (formerly Partner for 10 years) in charge of the Bangalore Branch. The Firm has 5 offices (Bangalore/Kochi/Kollam/Trivandrum/Dubai). The Firm offers services of Accounting/Auditing/CFO Services and Taxation Advisory Services.
Holds Independent Director Role with TJL Ltd for last two years.
Holds Governing Council role in an E Education LLP