FINANCIAL MANAGEMENT

ROLES OF CFO
 Roles of CFO

FINANCIAL MANAGEMENT
 Planning, directing, monitoring, organizing, and
controlling of the monetary resources of an
organization.

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 Roles of CFO

CHIEF FINANCIAL OFFICER

 The Chief Financial Officer (CFO) of a company
is the corporate officer primarily responsible for
managing the financial risks of the business or
agency.
 CFO is also responsible for financial planning
and record-keeping, as well as financial reporting
to higher management.

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 Roles of CFO

TRADITIONAL ROLE OF CHIEF

ACCOUNTANT
The Chief Accountants used to perform several
tasks which were:
 Preparing accounts
 Preparing budgets

 Operational reporting and interpreting

 Evaluating operating results

 Preparing income tax returns

 Establishing internal control procedures

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 Roles of CFO

TRANSITION FROM CHIEF ACCOUNTANT TO CFO

 Due to increased governance requirement there

arises a need to empower the chief accountant
and to make him responsible by requiring him to
sign the accounts.
 There comes the code of corporate governance,
which makes the chief accountant powerful and
more responsible.

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 Roles of CFO

RESPONSIBILITIES TOWARDS BOARD OF DIRECTORS

 The CFO is required to furnish necessary and

classified information to the board of directors.
 Annual business plans
 Cash flow projection
 Forecasts
 Long term plans
 Budgets
 Variance analysis etc.
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 Roles of CFO

RESPONSIBILITIES TOWARDS SHAREHOLDERS

 The CFO is required to provide all the necessary

data to be presented in the “Director’s Report”.

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 Roles of CFO

ROLES OF CFO
 To regulate, supervise and implement a timely,
full and accurate set of accounting books of the
firm
 To implement continuous financial audit and
control systems to monitor the performance of
the firm
 To timely, regularly and duly prepare and
present to the Board of Directors financial
statements and reports
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 Roles of CFO

ROLES OF CFO
 To comply with all reporting, accounting and
audit requirements imposed by the capital
markets
 To prepare and present for the approval of the
Board of Directors all financial and business
documents
 To alert the Board of Directors and to warn it
regarding any matter which could or does have
a financial implication.
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 Roles of CFO

ROLES OF CFO
 To collaborate and coordinate the activities of
outside suppliers of financial services
 To maintain a working relationship and to
develop additional relationships with financial
institutions
 To fully computerize all the above activities in
a combined hardware-software and
communications system

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 Roles of CFO

FOUR FACES OF CFO

 the CFO’s job is so fraught with challenge, it’s really four
jobs in one. We call these distinct roles the “four faces” of
the CFO.
1. Steward, preserving the assets of the organization by
minimizing risk and getting the books right.
2. Operator, conducting basic finance operations efficiently
and effectively.
3. Strategist, influencing the company’s overall direction.
4. Catalyst, instilling a financial mindset to execution and
risk-taking throughout the business.

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 Roles of CFO

CASE STUDY

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 Roles of CFO

ABOUT MCB
 MCB is one of the leading banks of Pakistan
 Incorporated in 1947
 Deposit base of about Rs. 280 billion
 Total assets of around Rs.300 billion
 1,026 branches, including 8 Islamic banking
branches, and over 300 ATMs, in a market with a
population of 60 million.

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 Roles of CFO

CORE RESPONSIBILITIES OF CFO AT MCB

 Leading and directing the finance function
 Determining the resources, expertise and systems for the
finance function that are sufficient within the overall
financial framework.
 Implementing robust processes for recruitment of finance
staff
 Reviewing the performance of the finance function and
ensuring that the services provided are in line with the
expectations and needs of its stakeholders.
 Seeking continuous improvement in the finance function.

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 Roles of CFO

PROMOTION OF FINANCIAL MANAGEMENT

 Assessing the organization’s financial
management style and the improvements needed
to ensure it aligns with the organization’s
strategic direction.
 Actively promoting financial literacy throughout
the organization.

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 Roles of CFO

VALUE FOR MONEY

 Challenging and supporting decision makers,
especially on affordability and value for money,
by ensuring policy and operational proposals with
financial implications are signed off by the
finance function.
 Developing and maintaining appropriate asset
management and procurement strategies.
 Managing long term commercial contract value.

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 Roles of CFO

SAFEGUARDING PUBLIC MONEY

 Applying strong internal controls in all areas
 Establishing budgets, financial targets and performance indicators
 Implementing effective systems of internal control
 Ensuring that delegated financial authorities are respected.
 Promoting arrangements to identify and manage key business risks, including
safeguarding assets, risk mitigation and insurance.
 Overseeing of capital projects and post completion reviews.
 Applying discipline in financial management
 Implementing appropriate measures to prevent and detect fraud and corruption
 Establishing proportionate business continuity arrangements for financial
processes and information.
 Ensuring that any partnership arrangements are underpinned by clear and well
documented internal controls.

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 Roles of CFO

ASSURANCE AND SCRUTINY

 Reporting performance of both the organization and
its partnerships to the board and other parties as
required.
 Supporting and advising the Audit Committee and
relevant scrutiny groups.
 Preparing published budgets, annual accounts and
consolidation data for government-level
consolidated accounts.
 Liaising with the external auditor.
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 Roles of CFO

RESPONSIBILITY FOR FINANCIAL STRATEGY

 Agreeing the financial framework with sponsoring organizations and

planning delivery against the defined strategic and operational criteria.
 Maintaining a long term financial strategy to underpin the organization’s
financial viability within the agreed performance framework.
 Implementing financial management policies to underpin sustainable long-
term financial health and reviewing performance against them.
 Appraising and advising on commercial opportunities and financial targets.
 Developing and maintaining an effective resource allocation model to
deliver business priorities.
 Leading on asset and balance sheet management.
 Co-coordinating the planning and budgeting processes.

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 Roles of CFO

FOUR FACES OF CFO AT MCB

The steward
 Accounting, control, risk management and asset

preservation are the province of the steward. The

steward must ensure company compliance with
financial reporting and control requirements.
Information quality and control rationalization
are top-of-mind issues for the steward.

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 Roles of CFO

The operator
 Efficiency and service levels are the primary

areas of focus for the operator.

 He dynamically balance cost and service levels in

delivering on the finance organization's

responsibilities, and adapt finance's operating
model as necessary.
 Talent management

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 Roles of CFO

The strategist
 As a strategist, he is a director, focused on defining the

future of the company in order to enhance business

performance and shareholder value.
 He provides a financial perspective on innovation and

profitable growth; leverages this perspective to improve

risk-awareness, strategic decision-making and
performance management integration; and translates the
expectations of the capital markets into internal business
imperatives.
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 Roles of CFO

The catalyst
 The catalyst, instilling a financial mindset to

execution and risk-taking throughout the

business. For insight into the challenges CFOs
encounter in each of their roles, click on the
appropriate segment of the Four Faces of the
CFO Framework to the left.

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 Roles of CFO

IMPACTS OF THE ROLE OF CFO

 Reliable reporting and controls
 Accurate and timely information
 Developed and retained current staff, while also
fostering new skills
 Better-informed decisions and structured
framework for evaluating new opportunities
 Increased level of locality in employees &
customers

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 Roles of CFO

SWOT ANALYSIS
Strengths

 Effective and well-judged stewardship of financial resources

 Consistently high priority given to disperse as much funding as
possible
 Increased levels of staffing, other resources and capital provision to
schools
 Emphasis on provision of quality office, including sustained
program for the rationalization, refurbishment and development
 Effective Payroll Services well integrated with Human Resources
 CFOs have emerged as key business partners to the CEO.

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 Roles of CFO

Weaknesses:
 The CFOs must the most learned and experienced

person. But there is no check in this state of affair,

which leads the company toward loss.
 The responsibilities and position which is the right

of a CFO, is not provided by the directors.

 The huge number of responsibilities makes the CFO

crazy and in hassle there are many chances of

mistakes done by CFO.
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 Roles of CFO

Opportunities:
 Effective communication strategy
 Balance accountability to the board and

shareholders for maintaining the integrity of the

financials and appropriate risk management with
loyalty to the CEO
 More training is risk management

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 Roles of CFO

Threats:
 Competition
 Economic factors
 Micro environment factors

 Macro environment factors

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 Roles of CFO

CONCLUSION
 CFOs' responsibilities go well beyond finance into
balancing compliance and risk management with
business-performance goals.
 the role of CFO becomes very important as he controls
the reflection of performance, which is reported to
different authorities and the organization is assessed by
them, and they must perform their job with professional
competency and integrity, so that the financial
statements give credible information to its users.

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 Roles of CFO

RECOMMENDATIONS
 CFOs should now spend more time on strategy and
operating issues and less on budgeting and accounting.
 Directors should work with CFOs more closely
 Directors should make sure there is agreement among
the management team about the most appropriate
measures to gauge a CFO's success
 CFOs must have broad-based business and finance
experience and build exceptional teams on whom they
can rely unconditionally

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