Six Essential Factors for Today’s CFOs

1st Chief Financial Officers Meeting analyzes new requirements of role

10/07/2015 Madrid

1er Encuentro de Dirección Financiera
(L to R) Professor José Manuel Campa, David Jiménez-Blanco (CFO, World Duty Free) and Juan Luis Ramírez Beláustegui (founding partner, Portobello Capital) / Photo: Javier Arias

"Today, more than ever, CFOs generate value," said Juan Luis Ramírez Beláustegui, a founding partner of Portobello Capital. Speaking on July 9 at the 1st Chief Financial Officers Meeting, Ramírez emphasized the fact that the duties of a Chief Financial Officer (CFO) are no longer limited to auditing, monitoring and cash flow oversight. They now include more strategic activities and play an important part in corporate social responsibility by guaranteeing sustainable growth.

Andrés García-Tenorio, CFO of Hotelbeds Group, agreed and said, "CFOs are held in high regard because of the strategic value they bring to businesses."

The meeting, held by IESE on its Madrid campus in conjunction with Deloitte and SAP, looked at the new responsibilities that have arisen for CFOs since 2008 as a result of the global economic crisis. These encompass everything from supervising a company's bookkeeping to playing a central role in business strategy development by advising CEOs.

Professor José Manuel Campa specified four main tasks that every CFO should perform, namely corporate financial planning, identifying new sources of financing, investor relations work, and dividend strategy planning.

What Every CEO Needs To Know

The event's participants then agreed on six key factors that every CFO ought to focus on in order to carry out these tasks more effectively and efficiently:

1. Planning for scenarios and anticipating the needs of partners and suppliers. "That's not easy, because it requires us to constantly re-evaluate almost all our company's assets, and knowing what's going to happen in the future is virtually impossible," admitted David Jiménez-Blanco, CFO of World Duty Free.

2. Offering security to attract investors. Attempting to artificially inflate forecasts inevitably causes problems, so all the information CFOs provide must be clear, concise and accurate. To that end, the participants agreed, CFOs should present the complexities of financial operations in a straightforward, comprehensible fashion.

3. Participating in growth strategy development, working hand–in-hand with other departments in their company. "That way, a CFO will always be aware of how business is evolving," said Antonio Arnanz, CFO of the DIA Group. "Our job is to pave the way for business to improve, but without losing sight of the company's financial situation," he added.

4. Always keeping transactions under control. Financial discipline is vital, despite the pressure that CFOs might be under whenever corporate transactions and operations take place. "The only way to make sure profits are sustainable is to keep an iron grip on accounts," said Andrés García-Tenorio.

5. Communicating with both their organization's external auditors and different operating areas. Such coordination is crucial and must be in line with the goals established by the CEO and board of directors. In turn, board members must support CFOs and offer them protection and security.

6. Beingprecise and efficient. "Efficiency entails balancing operating and financial goals," observed Ramírez Beláustegui. CFOs also need to be capable of analysis and of seeing the big picture in order to offer guidance on many key decisions. Understanding and a comprehensive perspective are essential for more than just monitoring numbers.