What indeed? Malley spoke to CFO Innovation’s Cesar Bacani about what he thinks CFOs, CEOs and other C-level executives should be doing post-crisis, the higher cost of doing business in a low-carbon, higher tax business environment, and other issues.  

I believe that the CFO should now increasingly refocus on medium-term ambitions, not just short-term ambitions, when the business starts to grow. At the moment shareholders have had an expectation of short-term results. These very same shareholders are offended by the fact that companies have been managing things poorly, but they have demanded short-term results. Shareholders are not, as individual groups, totally innocent. They’re also party to what’s been going on. They said, ‘We want short-term results so we can sell our shares and make money,’ and that creates expectations and demands on the business to supply that need – and all of a sudden, everyone gets upset when money gets lost.

 

The biggest problem for the global economy is to change mind-sets from short term to medium term. That would make an enormous difference globally. But that requires individual courage from individual CEOs in individual companies. It’s my view that we haven’t seen a lot of those behaviours from CEOs.

 

We haven’t seen them come out during the crisis and say, ‘Look, the world’s on fire, our companies have done some really good things, and it’s done some things in retrospect we could have done better. So I’m coming to you in the AGM, on the website, to the wider community and the press to say that we are going to take a medium term view. The reason we’re going to do this is because we want to set up a series of strategies that we know will work, but we’re going to take time to make them happen. If you are a short-term investor, perhaps we are not the one for you.’

 

Now that takes big courage, and it [needs] boards to support the CEO [who delivers this message].

 

The CFO is generally the person who has traded the organisation back to a reasonable level. So if things are being tough, it’s the CFO, in conjunction with the CEO, who has actually brought the organisation back on track. The credibility that comes with their skills need to be leveraged to start sending messages to the shareholders about the good things that have been done in the last 12 months.

 

‘We’ve reorganised the business. We’ve got a more flexible work force. We’ve got less inventory holdings. We’re more efficiently run. But you know what?  We’re starting to set medium-term goals.’ So there’s a whole communication plan that’s required to take advantage of good work done.

 

To be honest, my sense is that most people in the senior accounting role are so busy. They listen to what I’m saying, and say, ‘Well, that sounds great but we don’t have time to do the communication.’ I’m saying we’re going to have to find a way to do it.