Traditionally seen as bean counters, CFOs are now making the leap to assume bigger and more strategic roles in their organizations. And understandably so.
“In times like this when the macroeconomic environment has become more volatile, more global and more interconnected, depth in financial understanding is a clear asset. This is why the CFO’s role has become more pronounced in many organizations,” said Consuelo D. Garcia, country manager and managing director of ING Bank, N.V. Manila Branch.
For more than a decade now, Dutch financial giant ING and the country’s premier organization of financial leaders, the Financial Executives Institute of the Philippines (Finex), have been mounting the ING-Finex CFO of the Year Award to honor the country’s outstanding CFO.
Since 2007, when the annual search began, several of its CFO awardees have already transitioned to higher and bigger roles. These include Delfin Gonzalez Jr. (from CFO of Globe Telecom to chairman and president of AC Infrastructure Holdings Corp., a subsidiary of conglomerate Ayala Corp.), Sherisa Nuesa (from CFO of Manila Water Corp. when she won to president and director of ALFM Mutual Funds, the country’s biggest mutual-funds group), Jose Sio (from CFO to chairman of of SM Investments Corporation), Jaime Ysmael (from CFO of Ayala Land Inc. to president and CEO of property developer Ortigas & Co.) and Jeffrey Lim (from CFO to president of SM Prime Holdings Inc.).
‘CEO in disguise’
Experts, however, say the CFO’s ability to occupy the coveted corner office should no longer surprise, given his rapidly evolving role over the years.
In a CFO study conducted by the Ateneo Graduate School of Business and Finex Research and Development Foundation in 2014, lead author Dr. Eliseo Aurellado said it is, in fact, the CFO’s ability to step into the shoes of the CEO that has become one of the main criteria in the ING-Finex CFO of the Year annual search.
“What our findings show is that the CFO nowadays is actually the CEO in disguise, waiting in the wings,” said Aurellado, former head of the Finance Faculty of AGSB. “Now, we really see the CFO and CEO as complementary roles. While the CEO may be the visionary, the CFO must be a willing partner in strategy formulation and objective setting given the wealth of financial information at his disposal.”
ING-Finex CFO of the Year 2011 awardee Jaime Ysmael is a walking testament to this. In his new role as president and CEO of Ortigas & Co., the 57-year-old said his nearly two decades of experience as CFO of Ayala Land came in really handy. “It certainly opened a wider window for me and gave me the skillset needed to assume an operating role in Ortigas & Co.”, which is currently undertaking about P210 billion worth of mixed-use real-estate projects in the country, he said.
“Being a CFO is a good stepping stone for one to become a CEO, especially for a publicly listed company. The CFO’s role is quite unique: he does not just look at the financial aspect of the business but interact with all of the operating and support units because that’s the way the function operates. By having that unique access and exposure to the different lines of the business, the CFO is given the opportunity to add value to the company,” he added.
Transformational leader
For Sherisa Nuesa, the only lady to win the ING-Finex CFO of the Year Award to date, what sets the CFO apart is his “ability to be a common thread that binds the other operational elements because he can see the trees as well as the forest”. However, besides being the steward of the company’s financial resources and the CEO’s strategic partner, she said the CFO must also demonstrate the ability to take bold moves—a prerequisite to becoming a “transformational leader”.
At Manila Water Co., where she spent nine years and won the CFO of the Year award, Nuesa has been credited for taking the company public immediately after the 1997 Asian financial crisis. “It was the first IPO that sold shares internationally, and global demand was oversubscribed. While we had to move fast, we did everything on a calibrated basis. Before the IPO, we bought out the shares of an international water-utility partner and got the IFC [International Finance Corp.] as strategic partner. We made sure we covered all grounds,” she explained. Proceeds from the IPO enabled the privatized water utility firm to invest in massive pipe replacement that stemmed the tide of water leaks and dramatically reduced its nonrevenue water. As a result, Manila Water transformed from “a company that was barely breaking even to now a $1.6-billion entity,” she added.
Agile CFO
In addition to being bold and decisive, the CFO must also learn to be agile, especially as he transitions to become the “captain” of the organization who will steer the corporate ship away from a potential crisis and toward safer ground. This is why this year’s annual search is themed “The Agile CFO: Enabling Change”, as this befits the evolving role of the CFO.
“Today’s global environment is characterized by volatility, uncertainty, complexity and ambiguity. A lot of changes happen very quickly, and it’s also a very interconnected world. What happens outside affects the Philippines, though not always on the same magnitude. But the challenges can also be converted into opportunities when the CFO knows what he’s doing,” Ysmael said.
This is why he said the ING-Finex CFO of the Year Award is both relevant and significant. “The Award is the only one that recognizes the CFO’s role—a function that has been relegated to behind the scenes in the past. It has now really elevated the stature of the CFO position, effectively opening doors, not just for the awardees but for CFOs out there in terms of increased opportunity to be recognized, possibilities of performing an operating role and encouraging others to take on a career in finance. It’s a very good award for CFOs aspiring for bigger roles in their companies,” he added.