Habits of Highly Effective CFOs. Jack McCullough, Founder & Chair CFO Leadership Council

Transcription

1 Habits of Highly Effective CFOs Jack McCullough, Founder & Chair CFO Leadership Council

2 Agenda Speaker background The evolution of the CFO role Habits of highly effective CFOs How to become a highly effective CFO Questions and Answers

3 A Classically-Trained CFO BS Accounting; CPA/MBA Eight years with Big Eight, five as a Controller CFO for 26 different companies (Serving > 30 CEOs) Founder of the MIT Sloan CFO Summit Founder of the CFO Leadership Council

4 About The CFO Leadership Council Our Mission: CFO Empowerment Recognized a need for relevant and impactful professional development and peer networking Host 150 live events per year across 16 chapters Of CFOs, by CFOs, and for CFOs

5 Evolution of the CFO Role ( ) The Role of the Chief Financial Officer is less than 50 years old, and has experienced dramatic changes 1970s: Old School skills were paramount: financial reporting, compliance, expense management, forecasting 1980s and early 1990 deal-making expertise and a global vision became valued Late 1990s raising capital

6 Evolution of the CFO Role (2000 s) The dot.com crash and financial scandals changed the role in contradictory ways SOX: Return to old school skills Most trusted executive Wall Street: Most important Post recovery, CFOs emerged with increased respect for their forthrightness, communications style, and business acumen Boards directly involved in the hiring of CFOs

7 Evolution of the CFO Role (2010s) CFOs continued to garner more visibility and responsibility after the 2008 financial crisis COOs fade Responsibilities assumed by the CFO CAOs and CCOs emerge CFO to focus on growth and other strategic initiatives

8 What are the Habits of Highly Effective CFOs? Think strategically Communicate effectively Master deal making Build teams Serve as a trusted advisor Behave cross-functionally Maintain financial expertise Provide ethical Leadership

9 Think Strategically Strategic partner to the CEO Understand mission, goals and objectives Proactive action and information CF-GO, not CF-NO

10 Communicate Effectively Most trusted person in the organization Proactive and forthright communications Consistent message for diverse audiences Communication must be direct, clear, brief, truthful, and compelling Influence, build consensus, navigate politics, and personal agendas

11 Master Deal Making Involved in every major transaction Understand the strategic and financial objectives Proactively identify risks and opportunities, not just negotiate final terms IPO, M&A, joint venture, OEM, capital raising

12 Build High Performance Teams Single biggest challenges organizations face Even smaller organizations are complex Far-flung operations Multi-generational workforce Strong economy creates unprecedented opportunities for recent college graduates HR reports into CFO in > 70% of companies Build team for where you are going, not where you are

13 Serve as a Trusted Advisor to Your Board More involved in CFO search since SOX Fiduciary responsibility of Board of Directors has increased Boondoggle board meetings are a relic Audit committee needs to understand financial implications of major transactions No practical way to know everything that happens but can be held accountable The CFO is the most trusted person within an organization. The board is dependent upon the competence and integrity of its CFO.

14 Develop Cross-Functional Expertise Old School: Finance and accounting Recent School: HR, IT, Legal, Facilities, IR New School: Sales, Marketing, Corporate Strategy, Operations A great CFO is an organization s secret weapon: Its best seller, best recruiter, best deal closer, and best fundraiser.

15 Maintain Financial Expertise The Prime Directive: Accurate and timely financials 2015 saw a record number of restatements, breaking the 2014 record, breaking the 2013 record GAAP may be CRAP, but it is still the law of the land KPIs are more meaningful to non-financial types Never Forget: F is for Financial

16 Provide Ethical Leadership It is not in the DNA of a CFO to lie Ethics require a stronger commitment than just not lying Full and accurate disclosure of relevant information Evaluate needs of all constituencies: Stockholders, investors, clients, employees, suppliers, society As CFO, you are the most ethical person in the company and set the example for the entire organization. It s imperative that you demonstrate unquestioned ethical standards.

17 Become a Highly Effective CFO Walk the Floor! Seek non-financial roles internally Customer acquisition, help desk, marketing Join a corporate board Skills coveted beyond audit & comp committees Employers benefit Join Two Professional Organizations CFO Leadership Council type Non-Financial

18 Let s Keep in Touch Jack McCullough Founder & Chair CFO Leadership Council jack@cfolc.com (617)