Commentary: Inside the Mind of the CFO

One of the most fascinating things about doing an e-newsletter is the instant feedback writers and editors get from readers. You get to know which articles and subject matter are the most-read over a given period of time by the number of hits they accumulate.

 
But why should you be interested in what your fellow CFOs are reading?
 
It is useful, I think, to be aware of what your peers as a group are thinking about and where they are focusing their energies. If everyone is focusing on risk management, say, and you are not, you may be putting your company at a competitive disadvantage. And you may find yourself being left behind as your peers acquire new insights and knowledge.    
 
Cost-Cutting
There are many insights that we at CFO Innovation have learned about what’s in the mind of CFOs in Asia since the fourth quarter of 2009, when we started this publication. One is that senior finance executives are keeping a laser focus on cost-cutting and expense management. Among the most-read articles in 2009 were Cost Cutting: The CFO Check-Up (Part One), Positioning for Growth: The CFO Check Up (Part Two), and Decision Support: The CFO Check-Up (Final Part).
 
This series was capped by an interview with  Edmund Lee, partner, advisory services, at PricewaterhouseCoopers, who predicted that, going forward, “there will be even more emphasis around efficiency. There will be more emphasis on compliance and control, around tracking costs and making sure expenditures are proper and comply with the rules.” Lee also expects higher expectations around insight, including business partnering and faster and better information in finance.
 
But for the Grace of God . . .
We also find great interest among CFOs in what I think of as there-but-for-the-grace-of- God stories. The single most-read article in the year just past is Ernst & Young’s Akai Debacle, which analyses the legal troubles of accounting firm Ernst & Young arising from its audit of bankrupt Hong Kong company Akai Holdings. The companion pieces were also hot reads, including the latest update in October, Will Ernst & Young’s Akai Settlement Unravel?   
 
I don’t think it’s schadenfreude – I don’t think finance professionals take personal enjoyment from the missteps and misfortunes of accounting firms and other CFOs. I believe it’s more sympathy with the travails of finance professionals in circumstances that their peers know they can easily find themselves in. I think our readers are also driven by the desire to find out exactly what happened in order to draw lessons that may help them avoid getting embroiled in similar situations.  
 
Two other very popular articles, When the CFO Resigns and When the Accountant Disappears, are in the same vein. (Apologies for the whodunit mystery novel headlines; we couldn’t resist). Both are Greek tragedies of a sort, featuring a finance professional, as protagonist, faced with temptation and getting caught in the web of choices he may or hopefully may not regret. Read (or re-read) them and ponder.
 
White Papers
Positioned very highly on the list of most-read articles is a research report, CFO Innovation Asia Business Outlook Survey: Fourth Quarter 2009. It is by far the most downloaded white paper from the CFO Innovation online library.
 
This is a no-brainer. CFOs need to know what the future holds before it becomes the present, although there is no fool-proof way of finding out. One good route, though, is to find out how CFOs as a group think about the future, and this is what our quarterly business outlook survey aims to do.
 
The survey for the last quarter of 2009 found widespread optimism about the economy where respondents were based and about the prospects for their own business, with the majority expecting sales to increase, earnings to improve and new orders to rise. We have launched our next survey for the first quarter of 2010 (please click here to participate), and the preliminary findings indicate that economic and business optimism remains high.  
 
 
Case Studies
The two best-read case studies in 2009 were our interviews with California Fitness CFO MC Wong and Noble Group founder and CEO Richard Elman. Both discussed in-depth and in detail how their respective companies survived and thrived during the Great Recession. “In a downturn every single dollar counts,” observed Wong, who is also senior vice president at the regional physical fitness chain. “When you go through huge growth,  sometimes you don’t focus on the back of the ‘house,’ so it gets lumbered with a lot of inefficient, labour-intensive tasks. Nobody thinks of cutting these costs first, so it’s up to the CFO to review these costs and trim expenses.”
 
Elman, who was recently named Businessman of the Year by Forbes Asia , focused on risk management as a key competitive advantage at Noble Group, Asia’s largest diversified commodities trading company. “Risk management is very much part of our culture,” he said. “It’s not something that can just be tasked to the risk management department. It has to be something that is part of the day-to-day culture of the organisation, so that when people are approaching events or situations, they’re considering the risks and making rational decisions.”
 
Indeed, case studies are invariably among the most-read CFO Innovation stories. They include our interviews with Germon Knoop, Asia Pacific CFO for British telecom giant BT Global Services, and Terence Yap, CFO and vice-chairman of the board of New York-listed China Security & Surveillance.
 
In 2010
We will be interviewing more CFOs and other senior executives this year to give you insights into how CFOs are managing the transition from recession to recovery. If you have something to say or would like to get an inside look into a company or business you admire, please drop me a line at [email protected] and I’d be happy to oblige.
 
We will continue to track stories in 2009 that our readers particularly find compelling, such as developments in the Ernst & Young-Akai saga – the Hong Kong police have yet to complete a criminal probe. We will also pay special attention to other articles that resonate with you, including business outlook surveys, cost management topics and white papers on credit collection and cash and treasury management.
 
But we will also bring you stories on topics that CFOs do not appear to be so focused on today, but in our judgement will increasingly need to do so going forward. We have just published Global Warming: Winners and Losers in Asia and before that, Being Green: How Copenhagen will Alter the CFO’s Job.     
 
If you have missed any of the articles that have found special resonance with your peers, we urge you to read (or re-read them). You may just find something useful for your business and your own professional development.
 
About the Author
Cesar Bacani is senior consulting editor at CFO Innovation. 
 

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