Chief Financial Officer – What Constitutes Competency? ( I )

We read in the newspaper with interest on whether a person at a young age of 26 is capable of discharging the duties and responsibilities expected of a Chief Financial Officer ( CFO ).

The question is essentially what makes for a competent CFO? At the higher order, question can be phrased as whether he is trustworthy – i.e. a person who has integrity and the competency to fulfill the task entrusted on him. Taking an extreme example, a person can be a genius but hasn’t an iota of honesty in him. From the recent global fallouts, local shakeouts, if our memories do not fail us, there is no lack of examples of such traits. Would you have such personalities? On the other hand, an honest man who is clueless as to what he is doing is unlikely to do his job properly. Would you have him too?

Efficiency is regarded as a key measure of corporate governance, and breakdowns in governance could significantly erode business efficiency. Well-functioning markets require accurate information to allocate resources, and market participants must have confidence that our predominately voluntary system of exchange is transparent and fair. Unless the laws governing how markets and corporations function are perceived as fair, economic system cannot achieve its full potential. With globalization, corporates are finding the going tough, as traditional barriers are no longer capable of adequately protecting their turfs. With increasing choices, stakeholders are taking centre stage. Shareholders will vote with their feet if they do not get a decent return on their investment, consumers will gladly part their monies to your competitors if your product is not up to speed, and employees are likely to move when their efforts are taken for granted.

Corporates have no choice but to adopt an outside-inside approach. They must be customer-centric. This means that they have to be serious in wanting to understand the ever evolving needs of the customers. The only constant is change – so the saying goes.

Next: Senior executives with similar mindsets will compete along predictable lines, and the end result would be more features added to the product offerings to the extent that the average consumers are overwhelmed by them and honestly speaking have no need for most of the esoteric features.....