Chief Financial Officer CFO

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Chief Financial Officer - CFO

• Brings Logic Order
• to what would otherwise be Chaos

2
Evolution in CFO Requirements
3
Functional Evolution of Finance
Cash
Language of Finance
Business Analysis
Business Planning
Business Partner
4
Role of Finance

• Larger Role Applying financial skills to the
  broader context of the total business
• Current and future
• -as a business partner to general management

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Role of Finance

• 1st- The language of Finance provides a common
  denominator
• 2nd- Administers money for company
• 3rd- Minimal role demanded and unavoidable

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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

7
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)

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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

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Mission of Finance

• To Provide
• Value to Customers
• Appropriate Return to Investors
• Responsible Environment for Employees and
  Communities
• Bakane, CFO

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Mission of Finance

• Operate in Partnership across All Units and
  Functions to Further Corporate Goals
• Add Perspective and Match the Organizations
  Needs with Capital Sources

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Evolution in CFO Requirements

• Accounting Details ? Specialists
• ? ?
• Translator ? CFO
• of (not necessarily CPAs)
• Specialists
• (accounting) ?
• for ? MBAs
• (Senior Management)

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• Student
• Start-Up
• Multi-Billion Business

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CFO Mgt. Principles are the Same!

• Old or New Economy
• Small or Large
• Domestic or Multinational
• Good or Bad Company

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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

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CEOs Increasingly Turning to CFOs to

• Influence Decision Making
• Craft Internal and External Strategies
• Communicate to and Help Manage the Board
• Manage other Functions

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CEOs Increasingly Turning to CFOs to

• Help Manage Operating Companies
• Help Corporate Financial Literacy
• Add Economic Value
• Help Manage the CEO

17
CFO Company Variables

• Health of Company
• Personalities and Backgrounds
• of Senior Executives Directors
• Type and Complexity of Company
• Speed of Change

18
CFOs Intimate Interactions

• Board of Directors
• Audit Committee
• Compensation Committee
• Executive Committee

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Base Organization
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Expanded Organization
Shared Services
Strategic Planning
Strategic Business Unit, CFOs
Procurement SCM
Information Technology
Mergers Acquisitions Divestitures
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Share Holders
Board of Directors
Audit Committee
Civic Leaders/ Politicians
Analysts
CEO
COO
Major Suppliers
OPCP - Presidents
CFO
CFO
Admin.
Business Partners
Corp. Staff
Employees
Consultants
Finance Employees
Immense Time Consumption
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Setting Strategies

• Corporate
• Financial
• Personnel

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Tricon CFO Strategies Prioritize

• Reduce Debt/Re-franchise
• Get to Investment Grade
• Staff the H.Q.
• GA Reductions ? Shared Services
• Standardize Integrate Systems for Y2K
• Create a System Wide Co-Op
• Help stabilize business

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Setting Financial Policies

• Internal Control
• Accounting Policies
• Measurement Standards/Benefits

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Setting Financial Policies

• Financial Administration of Business
• Annual and Long Range Plans
• Evaluation of Major Expenditures
• Evaluation of Economic Trends
• Capital Structure

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Setting Personnel Policies

• Hiring, Training, and Development of the Finance
  Function
• Structure and Staffing

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CFOs People Focus

• Structure
• the Best Key Personnel
• Working Relationships
• Communications
• Operating Procedures

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Corporate Skill Curve
Leadership/ Political Mgmt.
Skill Requirements
Mgmt.
Technical
Small/Low
Large/High
Size/Complexity of Firm
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Functional Skill Curve
Sr. Mgmt.
Middle
Entry
Political Leadership Skills
Managerial Skills Multiple Tasks
Technical Skills
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CFO Career Grid
Corporate
Crossfunctional
International
New Areas
New Co.s
Manager
Entry
Cost Acct.
Planning, Reporting, Investor Relations
Business Analysis, Treasury
Strategic Planning
Acct.
Audit Tax
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CFO as a Business Partner- Assistant General
Manager
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Ethics Leadership

• Honesty
• Promise Keeping
• Fairness
• Respect for Others
• Comparison
• (Social Commitment)
• Integrity

• Teamwork Trust
• Diversity
• Recognition
• Ethical Management Practice
• Communications
• Empowerment
• The CFO

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CFO Dilemma(s)

• Conflict of Interests
• Credibility
• Integrity

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Becoming the CFO

• The Last Hurdle
• To
• CFO

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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

36
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.