|
 |
Essential Tasks for Today's CFOs By William Reeves November 2002 (Financial Executives International) Interestingly enough, ethical behavior, integrity and honesty are not new requirements for the CFO position. What is new is the level of scrutiny under which that office will operate in the coming years, and for good reason: Two of 2002's most high-profile incidents of corporate impropriety came at the hands of powerful CFOs at WorldCom Inc. and Enron Corp. With the unraveling of these two corporate giants, the days of swashbuckling finances and whiz kids doing deals to influence the stock market have come to an end - thankfully.
In the years ahead, expect a renewed interest in basics and solid accounting principles from the CFO's office, but also expect something else: The elimination of CFOs who aren't strong or resilient enough to undergo the increased scrutiny mandated by Congress.
Taking their place will be more powerful and influential executives, and the CFO's role as a strategist, capital manager and ambassador to the investor community will become essential to corporate health and stability. CFOs will be hired for their talents to think strategically, innovate, manage risks and build teams. Moreover, CFOs will be expected to touch every aspect of the corporate enterprise: treasury and risk management; pensions and benefits; investor and public relations; information technology; operations; and human resources.
With these new responsibilities in mind, every CFO in America should complete three essential tasks to build the corporate foundation for the coming year. Those include:
Update your company's risk management policy. Create a memo that outlines the program's key elements; a good one will be your first line of defense for financial risk management. List which assets must be protected, including technology, your corporate brand, your corporate property, as well as the common financial risks associated to assets: accident or theft, embezzlement or mismanagement of funds. Revise and strengthen your internal control policies and financial procedures, ensuring they are well understood throughout the company.
Review all aspects of your company's regulatory compliance status, including state, federal and SEC regulations. The associated risks can include everything from benefits plans to taxes to accounting practices. Expect to see an increased demand for corporate compliance officers; in fact, you might consider adding one to your staff.
Review your associations. Tending to your corporate brand and reputation is an increasingly important strategic initiative, and a thorough internal audit should evaluate your comfort level with current clients, accountants, board members and other external consultants.
If you are in the professional services industry, are you working with any bad apples? If so, are you protected from any related image or reputation issues? Your company's name is an important yet hard-to-quantify-asset; if protected and preserved, it can outlast even the most valued hard assets. At the board level, check to ensure that you don't have a member that might be an embarrassment down the line.
Finally, remember that the role of the CFO has grown in visibility and in importance since the corporate scandals of 2002. In many cases, a strong CFO could have made a difference for many of the year's troubled companies.
WILLIAM B. REEVES is a member of Spencer Stuart's Worldwide Board of Directors, a senior member of the Global Financial Services Practice and a core member of the Financial Officer Practice.
Subscribe to Financial Executive! The flagship publication of Financial Executives International (FEI), the magazine provides senior financial executives with financial, business and management news, trends and strategies to help them work better, faster and smarter. For more information about FEI, visit www.fei.org.
Was this information helpful? Please rate this article in the box below or write to editor@smartpros.com
2002 Financial Executives International. Reprinted with permission.
|
|
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
