THE ROLE OF THE CFO · 1/15/2015 · Roles of the CFO •Regulator of Risk Provide framework for...
Transcript of THE ROLE OF THE CFO · 1/15/2015 · Roles of the CFO •Regulator of Risk Provide framework for...
THE ROLE OF THE CFO
Renée Hornbaker
CFO, Stream Energy
Dallas Fort Worth Area IMA
January 15, 2015
My Journey
Roles of CFO
CFO and Director
What I Have Learned
Public Accounting
• How did this impact my career path?
▫ Foundation: technical and controls
▫ Credibility
▫ Analysis
▫ Multiple businesses and industries
▫ Board interaction
▫ M&A experience
Other Positions• Southwest Forest Industries
▫ Assistant Controller / Assistant Treasurer Planning and budgets
Cash management
Risk management
Information technology
External financial reporting
• Circle K Corporation▫ Vice President / Assistant Treasurer▫ Vice President Information Technology▫ Sr. Vice President Financial Services
Other Positions• Education Management Group
▫ CFO; multiple hats including sales support, accounting systems, benefits, product development
• Phelps Dodge Corporation
▫ Director Financial Analysis and Control
New position
5 industrial businesses
International scope
Process improvement
Other Positions• Flowserve Corporation (BW/IP)
▫ Vice President Business Development▫ CFO
Strategy M&A Financing Process improvement
• Shared Technologies▫ CFO
M&A Financing Financial team Process improvement
Other Positions
• Stream Energy
▫ CFO
Financial team
Controls
Process improvement
Risk oversight
Strategy and growth
Business responsibilities
Key points
• Good foundation
• Took career risks
• Expanded capabilities
Roles of the CFO*
• Freedom Fighter
▫ Reduce complexity and detail
▫ Streamline processes
▫ Purge and eradicate little value work
• From Reinventing the CFO: How Financial Managers Can Transform Their Roles and Add Greater Value by Jeremy Hope
Roles of the CFO
• Analyst and Adviser
▫ Attract and keep the best people and build the right team
Know the business
Analytical
Improvement orientation
▫ Work in teams
▫ Communicate
Roles of the CFO
• Architect of Adaptive Management
▫ Replace detailed annual planning cycle
▫ Install effective steering mechanisms
▫ Push down some planning and decision-making scope and authority to frontline teams
Roles of the CFO
• The CFO as Warrior Against Waste
▫ Eliminate embedded costs and flatten hierarchy
▫ Standardize processes
▫ Ensure projects add value
▫ Remove the non-value-added wastes
Roles of the CFO
• Master of Measurement
▫ Bring measurement back under control and provide clear guidance about its meaning
▫ Focus on six to seven
▫ Measures should relate to purpose and strategy and not be linked to targets
Roles of the CFO
• Regulator of Risk
▫ Provide framework for good governance and risk management
▫ Employ multiple levers of control that support:
corporate governance controls
internal controls
strategic controls
feedback controls
▫ Identify and deal with pressure points that encourage excessive risk-taking
Roles of the CFO
• Champion of Change
▫ Transforming finance operations
Beginning with the vision and goals
How to get buy-in from key people
How to implement the changes
Evolution of Role
Controls
Engineering
Compliance
Strategy
• Independent mindset
• Business understanding
• Big picture
• Analytic
• Strategic
• Process improvement focus
Key Competencies
Differences
Management Director
− Run organization− Keep board informed− Seek board’s counsel
− Select, evaluate and support CEO and management
− Recommend strategies, goals and policies
− Approve strategy and high level goals and policies
− Bring to board well-documented recommendations
− Make major decisions
− Provide board timely information− Communicate with candor− Be responsive to board
− Oversee management and organizational performance
− Interact with investors − Represent investors
CFO as a Board Member
• How to get opportunity?▫ Build brand
▫ Expand skills
▫ Leadership beyond your company
▫ Let others know of interest
• Why do it?▫ Improve CFO skills
▫ Enhance relationship with my board
Ask
Answers
Ownership
Skills
Risks
Summary
MY JOURNEY
• Solid Foundation• Diverse Experience
CFO ROLES
• Variety of Roles• Use Different Roles in Different Situations
Board Member
• Differences from management• Pursue like a job
Key Learnings
• Ask questions, be prepared, develop skills and take risks