CFOs asked to adopt forward-looking approach

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LAHORE: Corporate leader-turned-politician Asad Umar advised chief financial officers of companies to adopt a forward-looking approach and design strategies to shape the future of companies, taking into account the future challenges and opportunities.


He was addressing as keynote speaker at the CFO Conference 2013 organised by the Institute of Chartered Accountants of Pakistan.


He said that CFOs should not confine themselves to the role of providing data and analysis. But, they should provide assessment on the way the business is moving and what should be done to move it in right direction.


“With so much uncertainty due to government measures, it is imperative for any CFO to have eyes and ears in Islamabad,” he added.


He said business plan and strategies formulated by financial wizard of a company should be based on ethics and good moral values.

He should articulate a vision that is inspiring and morally good. He said no great achievement has ever been achieved without a strong vision based on strong values. Umar said that CFO is the defecto deputy chief operating officer of a company irrespective of the fact whether he is officially assigned this job.


He said things start at the CFO level and nothing moves without his knowledge. He said it is for this reason that a CFO should have complete knowhow about the company’s business.


“You should have good rapport with staff in all departments be it marketing, human resource or production,” he advised the conference participants, adding that best knowledge for risks will come from the people working in organisation.


He said traditionally the people of finance department of a company remain aloof from other staff members. The reason, he added, is that all other departments have to come to the finance for their needs. “This has to be changed,” he said, adding that his rise in corporate ladder was more due to the time he spent in various departments of Exxon (later Engro).


He said a CFO should spend 60 percent of his time with the troops operating in different departments of an organisation. They should devote only 40 percent of their time on financial matters.


He said all things that happen at lower level are not reported in board room. “Only filtered information reaches board meetings that sometimes hide some crucial facts,” he added. “If you see some young member of your finance department spending more time mingling with members of other departments instead of admonishing, encourage them, he advised.


President ICAP Ahmad Saeed said recent studies have revealed that by 2020, CFOs would consume 90 percent of their time on insight towards business and planning and 10 percent on financial affairs.


He asked chartered accountants of the country to prepare themselves for that role. He also advised them to gather a competent finance staff. He said the secret of a successful CFO is a competent financial team.


Senior Technical Manager International Federation of Accountants Vincent TopHoff said that risk management should be an integral part of any strategic management plant. The strategy, he added, should be based on good governance and ethics. Sustainability and corporate responsibility should be part of that strategy, he added.


He said that no strategy is without risk but a prudent strategist envisages all risks and strategy to mitigate it. He said safest place for a ship is to stay in harbour. However, he added, the mandate of a ship is to transport goods and passengers.


When it moves out of harbour, it could encounter numerous dangers, he said, adding that a ship as an asset is useless if it does not move for transportation. In the same way, he added, no business is without risk.


He asked accountants to focus on mitigating risks, knowing well that the rest of the management is bent upon increasing the risks.

Courtesy:  The News

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