The Telegraph
Since 1st March, 1999
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From book-keepers to guardian angels

Mumbai, Sept. 3: The CFO is crawling out of the woodwork. And, standing alongside the thought-leaders.

The bleary-eyed bean-counter ploughing through a minefield of company data is turning into a fountainhead of ideas that transform corporate destinies.

At least, CEOs at two of the country’s venerated conglomerates profess to have put their chief financial officers (CFOs) at the forefront of decisions that determine where and how their companies will go in future.

ITC boss Yogi Deveshwar and Larsen & Toubro (L&T) spearhead A. M. Naik told a CII seminar dedicated to finance heads that the book-keeper was now emerging as the conscience-keeper in corporate India.

The two men were among the retinue of business leaders speaking their mind at the CFO Summit, 2003, organised by the Confederation of Indian Industry (CII) here today. Deveshwar felt a CFO could step into a CEO’s shoes if he had the ‘capability, courage and bandwidth to comprehend business dynamics and lead people’.

Sitting at the head of a multi-product giant, he knew better. “The CFO is now the custodian of planning processes and performance management of a company. He has a culture-building role and a responsibility to evaluate strategic decisions,” the ITC chief said.

On the other hand, Naik, who recently saw his company’s cement division acquired by Grasim Industries, saw the CFO stand next to the chief executive warding off potential raiders in a widely held company.

Naik said the days of the CFO bogged down in numbers were over. “ The CFO’s responsibility is now more of a strategic one. That means spotting opportunities for mergers and acquisition, besides helping a company meet exacting global accounting standards.

“The CFO now supports the CEO in shaping business and boosting shareholder value. This has to be juggled with the job of bringing in treasury profits,” Naik said.

Given such diverse values that a CFO must embody, both Naik and Deveshwar felt it was better to groom an insider who is steeped in the company culture.

Naik went a step ahead, suggesting finance heads should be rotated within an organisation in a way that gives them the experience to steer a special business unit. This, he said, would enable them to shoulder responsibilities better and wield a greater degree of influence.

The summit also addressed the significance of mergers and acquisitions as they pan out these days. Some speakers called for a relaxation in the Reserve Bank of India (RBI) rules on funding company acquisitions.

Dhanpal Jhaver, head (M&A advisory) at ICICI Securities, felt firms were finding it difficult to secure finance from banks for acquiring shares of another company. “Banks should be permitted to provide capital that can be used to finance acquisitions,” he added.

Kishore Chaukar, managing director of Tata Industries, differed. Money, he said, was not a problem for buyouts, which could even be done with stocks.

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