The Role of Chief Financial Officer in Corporate Governance

The Role of Chief Financial Officer in Corporate Governance

Foreign experience shows that in addition to the traditional functions of reaction and supervision, contemporary CFO should first take part in strategy, strategic planning and strategic guidance. The chief financial officer should fully consider the interests and needs of all parties and make use of his comprehensive management ability to ensure the comprehensiveness, scientificity and enforceability of the strategic plan.

(A) the chief financial officer is a decision-making participant in corporate governance

As a global manager, CFO should not only participate in strategic planning and strategic guidance, but also actively participate in major company decisions, including company reform decisions, business decisions, financing decisions and so on. In the process of decision-making, CFO is one of the best judges of whether the project can achieve the expected goal by questioning and demanding to change the strategy and further develop the strategy. By participating in the company's decision-making, we will ensure that national macroeconomic policies such as accounting standards, general financial rules and tax policies are implemented in microeconomic activities, ensure the feasibility of the company's business decisions, and ensure that the company's business objectives are realized.

(2) The chief financial officer shall assist the operators in formulating the annual budget plan.

Budget is a very important link in the company's operation. When making a cash flow budget, CFO should be clear about the short-term strategic objectives of the company and the actual situation of the company, and be very familiar with the whole business process and situation. More importantly, when formulating the budget, all employees should be mobilized to participate. It is not only the concept of financial data, but also a booster for the company's growth and development. Only when the team members really participate in the budget can they understand the company more truly and comprehensively and deepen their recognition of the company, which is also a good exercise for employees. This is very necessary for cooperation and communication between all employees. In the budget of all employees, CFO is the leader, even the coordinator, and has the responsibility to help the whole team establish an atmosphere of mutual assistance and trust through the budget process.

(C) the chief financial officer should play the role of supervisor

CFO, as the representative of shareholders' interests, mainly supervises the company's financial activities before, during and after the event, which will involve the control of the company's financial activities in terms of system, funds and personnel. The CFO's duty is to report the authenticity of the company's financial statements and reports, and share the responsibility with the general manager * * *, and if necessary, be responsible for the losses caused by the company's various financial chaos and decision-making mistakes.

(D) The chief financial officer should be a partner and strategic partner.

CFO is a partner of the board of directors, shareholders, auditors and regulatory authorities, and also a person who adds added value to the company through actions, and strives to keep the company's development strategy consistent with investors' expectations. In CFO's work, on the one hand, we should control the company's budget and guard against all kinds of risks that may be encountered soon; On the other hand, we should also put forward constructive suggestions for the company's long-term development strategic objectives, and establish a reasonable financial support system in the process of strategic implementation to support the company's normal operation. For example, what CFO does is to become a person trusted by the board of directors, so that the board of directors can know the true and accurate information of the company in the process of communicating with CFO. Therefore, this requires CFO to fully grasp all aspects of the enterprise, not just the financial situation. In order to obtain more stable development, even leap-forward development, the CFO of some enterprises needs the support of and is responsible for the board of directors even if it is not directly appointed by the board of directors.

Improve CFO's own quality

Chief financial officer plays an important role in perfecting modern enterprise system and enterprise decision-making, execution and supervision system, and is an organic part of modern enterprise internal restraint mechanism. History has given CFO a new historical mission, and also put forward higher quality requirements for CFO.

1, CFO must have good accounting professional ethics and financial management quality. In recent years, a series of accounting fraud cases at home and abroad, especially those of Enron, WorldCom, Xerox, Merck and other companies, once again remind people that the collapse of professional ethics defense line will bring disastrous consequences to this profession. Financial personnel, especially CFO, must have good moral quality, high professionalism, love their jobs and be loyal to the enterprise. Moreover, CFO should have a wide range of knowledge, not only solid enterprise financial knowledge and modern enterprise financial management professional knowledge, but also strong business ability and rich practical operation ability, be familiar with audit norms and skills, and have deep attainments in financial work. CFO's professional knowledge should not be limited to the financial field, but also involve all aspects. He must know the knowledge of finance, law, taxation, foreign languages, computer network and so on, and become an all-round compound management talent.

2.CFO should have rich practical experience. Nowadays, enterprises are developing very rapidly and the competition is fierce. Companies don't have time for CFO to grope while working. Therefore, CFO should have accumulated rich practical experience and be able to play a role in CFO's job immediately.

3.CFO should also have strong learning ability, adaptability and competitiveness. Nowadays, enterprises are facing a rapidly changing world, and new things emerge one after another. So the ability to learn and accept new things is very important. CFO should keep up with the trend of the times, constantly enrich himself, learn new knowledge, master new skills, better serve the enterprise and enhance its value. First of all, from the outside of the enterprise, CFO should have the ability to analyze and judge the development trend of the whole national economy and the changes in the market environment, grasp the financial opportunities and risks of the enterprise in time, and provide the basis for enterprise decision-making. Secondly, from the inside of the enterprise, CFO should be able to find some laws from the complex financial activities of the enterprise, find out the existing problems and put forward measures and methods to solve the problems.

4.CFO should have good communication skills and superb social skills. CFO's job determines that he has to deal with everyone in the enterprise, communicate, communicate and coordinate with shareholders, media and other stakeholders outside the enterprise. Therefore, CFO needs to have good interpersonal communication skills to ensure effective financial supervision. In addition, it is necessary to have good social adaptability, a broad and profound understanding of the global economic market and cultural traditions, the ability to properly handle all kinds of interpersonal relationships, the ability to negotiate, contact and communicate with others, and the ability to coordinate and communicate with others internally, so as to optimize the internal and external environment of financial management.

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