Chief Financial Officer - CFO

Brings Logic & Order to what would otherwise be Chaos

Evolution in CFO Requirements

Functional Evolution of Finance

Cash Language of Finance

Business Analysis

Business Planning

Business Partner

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

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

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 Organizations Needs with Capital Sources

Evolution in CFO Requirements

Accounting Details Specialists Translator CFO of (not necessarily CPAs) Specialists (accounting) for MBAs (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

Strong Technical Knowledge (Analysts)

Need to Directly Control the Information Released

CEOs Increasingly Turning to CFOs to:

Influence Decision Making
Craft Internal and External Strategies

Communicate to and Help Manage the Board

Manage other Functions

CEOs Increasingly Turning to CFOs 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

CFOs Intimate Interactions

Board of Directors Audit Committee

Compensation Committee
Executive Committee

Base Organization

CFO

Corporate Audit

Corporate Accounting Tax

Management Reporting & Business Analysis

Investor Relations

Treasurer

Expanded Organization
CFO

Corporate Audit

Corporate Accounting Tax

Management Reporting & Business Analysis

Investor Relations

Treasurer

Shared Services Mergers Acquisitions Divestitures

Strategic Planning

Strategic Business Unit, CFOs

Information Technology

Procurement SCM

Share Holders Board of Directors Civic Leaders/ Politicians CEO Major Suppliers CFO CFO Business Partners Employees Finance Employees Admin. Audit Committee COO

Analysts
OPCP - Presidents

Corp. Staff Consultants

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

6. Help stabilize business

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

CFOs People Focus

Structure the Best Key Personnel Working Relationships Communications Operating Procedures

Corporate Skill Curve

Skill Requirements Leadership/ Political Mgmt. Mgmt.

Technical

Small/Low
Size/Complexity of Firm

Large/High

Functional Skill Curve

Sr. Mgmt.

Middle

Entry

Technical Skills

Managerial Skills Multiple Tasks

Political & Leadership Skills

CFO Career Grid

Corporate

Crossfunctional International New Co.s

Manager Entry

New Areas

Audit Acct. Tax

Cost Acct.

Planning, Business Reporting, Analysis, Investor Treasury Relations

Strategic Planning

CFO as a Business Partner - Assistant General Manager

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

Leadership
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.