THE ROLE OF THE CFO. Renée Hornbaker CFO, Stream Energy Dallas Fort Worth Area IMA January 15, 2015

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1 THE ROLE OF THE CFO Renée Hornbaker CFO, Stream Energy Dallas Fort Worth Area IMA January 15, 2015

2 My Journey Roles of CFO CFO and Director What I Have Learned

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4 Public Accounting How did this impact my career path? Foundation: technical and controls Credibility Analysis Multiple businesses and industries Board interaction M&A experience

5 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

6 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

7 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

8 Other Positions Stream Energy CFO Financial team Controls Process improvement Risk oversight Strategy and growth Business responsibilities

9 Key points Good foundation Took career risks Expanded capabilities

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11 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

12 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

13 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

14 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

15 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

16 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

17 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

18 Evolution of Role Controls Engineering Compliance Strategy

19 Key Competencies Independent mindset Business understanding Big picture Analytic Strategic Process improvement focus

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21 Differences Management Run organization Keep board informed Seek board s counsel Recommend strategies, goals and policies Bring to board well-documented recommendations Provide board timely information Communicate with candor Be responsive to board Interact with investors Director Select, evaluate and support CEO and management Approve strategy and high level goals and policies Make major decisions Oversee management and organizational performance Represent investors

22 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

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24 Ask

25 Answers

26 Ownership

27 Skills

28 Risks

29 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