Multiple reports on CFOs have highlighted the need for CFOs to extend their management role from a basic accounting / reporting function to a strategic contributor to the business. While this is widely acknowledged as a deep underlying force shaping CFO careers, the roadmap to strategic influence is not clear altogether. Our qualitative study concentrated on the latter point: how to bridge the transition points for CFOs from technical expertise to strategic influence.

1. June 2011 Confidential and Proprietary to DS&H DS&H CFO Study Report CFOs: Pathways to become lean & strategic … Seeing clearly ahead is now paramount André Du Sault, MBA (LBS), MPA (Harvard) www.dusaulthaddad.com 1

2. June 2011 Confidential and Proprietary to DS&H 2 DS&H www.dusaulthaddad.com Study framework INITIAL OBJECTIVES & KEY QUESTIONS In an environment of hyper competition, accelerated changes, how can CFOs build on their technical expertise to play a greater strategic role? What is the profile of the new CFO incarnation? What new capabilities CFOs need to develop or acquire? What is blocking them? 3. What are the new expectations of the key stakeholders? METHODOLOGY We have interviewed about 50 senior executives from a broad range of perspectives: CEOs, CFOs, HROs, IT specialists, bankers, headhunters, administrators, etc. FOR WHOM CEOs, CFOs, VP Finance, Controllers, keen to build value added in the Finance function.

3. June 2011 Confidential and Proprietary to DS&H 3 DS&H www.dusaulthaddad.com CFO study findings (6) Young CFO candidates are caught between two outlooks: . A narrow view of the job in smaller companies, with standard financial reports as the main output . A demanding role in larger companies, where CEOs increasingly require lean-minded & strategic CFOs CFO candidates are usually not schooled to be CFOs, leading to a poor blend of technical and strategic skills Key management and strategic skills are often integrated too late in the CFO career path to yield senior influence at the C-Level The job of Controller or young CFO stands at a pivotal point: What is integrated at that level (style, learnings, skills, responsibilities) shapes the potential for the CFO position. CFOs receive little or any coaching when handling high stake transactions that will make or break their reputation and credibility The pathway from CFO to COO/CEO is misunderstood and misapplied

4. June 2011 Confidential and Proprietary to DS&H 4 DS&H www.dusaulthaddad.com FROM FINANCIAL ACCOUNTING TO CO-PILOT There is increasing pressure on CFOs to perform under tight budgets & means an expanding scope of strategic responsibilities changing structures moulded by globalisation and the need to balance flexibility and efficiency. . Yet the roadmap for improvement and a new skills set is often unclear for many CFOs.

5. June 2011 5 DS&H www.dusaulthaddad.com FROM FINANCIAL ACCOUNTING TO CO-PILOT In many competitive industries, stakeholders require a lean & strategic CFO as co-pilot for the enterprise Controller Co-pilot Lean TECHNICAL PRESSURES New accounting standards New business processes Complex Information technology Designing information architecture Facing budget limitations CEO Board Investors Bean counter Bankers Standard Functional Strategic STRATEGIC PRESSURES Leading business transformations Leading operational excellence Networked organisation Managing international ventures Outsourcing, off shoring Deal maker Confidential and Proprietary to DS&H

6. June 2011 6 DS&H www.dusaulthaddad.com FROM FINANCIAL ACCOUNTING TO COPILOT Young CFOs start off with technical tools to address technological challenges, but soon face a wide range of expectations from stakeholders to deliver strategic value master of cash flow business plan - strategy proper controls in place Investors transparency – integrity -controls financing strategy CEO – CFO relationship Board intelligent reports business acumen value driven CEO CFO master of cash flow finance skills business communication Bankers processes planning controls info IT clear policies information systems that work Employees Head-hunters team building leadership & people skills technical & strategic skills Confidential and Proprietary to DS&H

7. June 2011 Confidential and Proprietary to DS&H 7 DS&H www.dusaulthaddad.com The roadmap from technical expertise to strategic CFO will include 3 stages : 1. standard challenges for good basic performance in reporting & budgeting 2. high stake initiatives that lead to senior roles and corporate influence 3. continuous learning of technical, managerial and strategic skills

8. June 2011 Confidential and Proprietary to DS&H 8 DS&H www.dusaulthaddad.com For instance, challenges for a good basic performance include: organizing reporting with high automation developing custom tools for finance & cash flow controlling internal planning and strategic tools capturing in-depth understanding of industry and operations managing international operations from a distance

9. June 2011 Confidential and Proprietary to DS&H 9 DS&H www.dusaulthaddad.com High stake transactions shape reputation & credibility: overseeing complex IT projects driving corporate operational excellence programs leading strategic planning implementing mergers and acquisitions negotiating international ventures

10. June 2011 Confidential and Proprietary to DS&H 10 DS&H www.dusaulthaddad.com Senior roles call for sharper people and strategic skills: reading people presenting for impact translating vision into action leading large value creation projects designing structure & organisation winning investors’ trust

11. June 2011 Confidential and Proprietary to DS&H 11 DS&H www.dusaulthaddad.com Study participants indicated that poor career guidance may lead young CFOs & aspirants to make the following mistakes: not reading challenges well ahead choosing titles ahead of better mentoring relying solely on technical skills for influence letting ego build up a trap for a downfall having no plan B in their pocket losing passion of learning losing track of family Seeing clearly ahead shapes more productive careers * include controllers, VP finance, young CFOs...

12. June 2011 Confidential and Proprietary to DS&H 12 BUILDING UP A ROADMAP FOR OUTSTANDING CFO SKILLS

13. June 2011 Confidential and Proprietary to DS&H 13 DS&H www.dusaulthaddad.com BUILDING A ROADMAP FOR THE CFO: 5 LEVELS OF COMPETENCES The potential value added from the F&A function is wide and incremental: from basic financial statements to international fluency, to co-pilot. CEOs can plan to accelerate the CFO’s contribution. Strategic International Advanced Strategic planning Operational excellence Growth & M&A Company valuation Intermediary Global fluency Foreign exchange Partnerships Forecasts Financing strategy Investments Basic Value-added reports Budget planning Strong teams Standard accounts COGS

14. June 2011 Confidential and Proprietary to DS&H 14 DS&H www.dusaulthaddad.com Early roadblocks are mostly technical, but shift rapidly to managerial and strategic. TYPICAL ROADBLOCKS DESIRED OUTCOMES LEVEL Co-pilot 5 Early mentoring of strategic skills Strategic influence International expert Experience in managing risk from a distance Global fluency 4 Advanced Adequate finance & cash flow training Finance strategies 3 Intermediate Integration of IT platform & accounting Building strong teams 2 Operational intelligence Basic 1 Mastering COGS Financial statements

15. June 2011 Confidential and Proprietary to DS&H 15 DS&H www.dusaulthaddad.com On becoming lean & strategic CFO FOR THE 21ST CENTURY Conclusions Lean & strategic finance functions require a match between the CEO’s demand for high standards and the CFO’s technical and managerial capabilities. CFO candidates should balance their continuous professional development in a mix of technical, managerial and strategic skills. Coaching and training for young CFOs can greatly accelerate their potential. Skills development can be structured for quick pay-offs.

17. Having a budgeting and strategic process impeccably integrated to the information systems.

18. Preparing monthly executive reports limited to 10 pages, that speak loud and clear, with insights.

19. Managing international treasury (financing and hedging) programs, over and through financial crises.

20. Meticulous planning of M&A activities, with emphasis on integrating and capturing synergies.

21. Executing several corporate programs on Operational Excellence.

23. Sweden - Auditor: Internal audit program

24. Brazil - Controller: Multiple financial crises, with hyper inflation (1000% p.a.)

25. Philippines - CFO & HR: Restructuring for growth

26. Spain – CFO: Turnaround and best merger operation acknowledged within the Novartis group

28. Public fund raising for Capital Pool Companies

29. Restructuring of finance departments for higher productivity and coaching new CFOs

30. M&A activities for SMEs (USA-Canada). About the author André Du Sault MBA (LBS) MPA (Harvard)

31. June 2011 Confidential and Proprietary to DS&H 17 DS&H www.dusaulthaddad.com DS&Hhas designed a series of programs for better CFOs On becoming lean & strategic CFO FOR THE 21ST CENTURY DS&H CFOTraining Programs For more information & insights from the study: André Du Sault 514 777-1538 adusault@dusaulthaddad.com FINANCE FOR small SME 1.5-day Value added beyond accounting DevelopOutstanding CFOs 3 days The foundation for senior roles The CFO as co-pilot 0.5-day modules High level expertise & influence

32. On becoming lean & strategic CFO FOR THE 21ST CENTURY DS&H CFOIndividual Programs© For more information & proposals: André Du Sault 514 777-1538 adusault@dusaulthaddad.com June 2011 18 Confidential and Proprietary to DS&H 1. Coaching the young CFO and aspirants Seeing clearly ahead Critical issues & smart choices 2. Fixing and improving the F&A dept Before it all crumbles down Symptoms & remedies 3. Mastering foreign exchange risks When doing business overseas A discipline & tool kits

33. June 2011 Confidential and Proprietary to DS&H 19 DS&H www.dusaulthaddad.com On becoming lean & strategic CFO FOR THE 21ST CENTURY DS&H CFOConferences For more information & insights: André Du Sault 514 777-1538 adusault@dusaulthaddad.com International finance Mastering foreign exchange Successful international partnerships Doing business in Asia with no regrets From great ideas to breakthrough innovations Lifting strategy onto the board agenda