Increase in role of CFOs in corporate governance

Hyderabad, Sep 22: With globalisation, volatile capital markets, ever-increasing shareholders expectations being the order of the day, Chief Financial Officer (CFO) has assumed unprecedented importance in corporate governance, Confederation of Indian Industry (CII) Andhra Pradesh chapter Past President M K Patodia said today.

Addressing a seminar "Role of CFO - A CEO's perspective", organised by the CII here, Mr Patodia said growing competition, a sharper focus on corporate governance and technological innovation played a vital role in radically changing the way CFO impacted an organisation.

The CFO should look beyond the balance sheet to understand and manage risks and opportunities and communicate in a credible and clear fashion to the executive team and to employees of the company and outside to customers, shareholders, regulators and others, he said.

The CFO, more than the Chief Executive Officer (CEO), was now becoming the person upon whom many boards depended for solutions, he observed.

Quoting a survey of 500 senior executives conducted by Deloitte Consulting and Business Week, he said it demonstrated that the CFO was pivotal to restoring public trust and he had to serve as a bridge between the CEO and the board on governing matters.

In a survey of CFO Europe, 71 per cent of the CEOs reported that their CFO was their closest business confidant.

A mediocre strategy executed swiftly and effectively had a higher chance of success than a brilliant strategy implemented tentatively, he summed up.

UNI