Chief financial officer is the back bone of any company as he is the main custodian of all the finances and investments. He manages the inflow and outflow of the finances for which he needs to be well wised in order to bring equilibrium in financial matters as well as reduce the cost expenses. Whenever a new CFO is appointed by the company, the board and the management comes out with great expectation from him that he may lead us with new and better financial plans. First and foremost requirement of CFO is to have a better understanding with the board as well as the Audit committee so that his working may be smoothening.

Audit Committee:           Formation of audit committee is another factor that can be influential and management needs to make neutral as well as independent audit committee. The purpose of audit committee is to keep all the financial matters in line with the policies and monitor / point out the misrepresentation in the financial reports. In addition, audit committee is necessary to be unbiased and should not be friendly with the finance departments which may leads to financial risk matters. However, a newly inducted CFO tends to develop a strong relation with the audit committee so that the committee can openly share any financial risk matters with him if the nature of the risk is moderate. Especially CFO needs to share all his previous experience with the chairperson of audit committee and try to learn the major financial matters of the company from him where he is being newly inducted. In this way, he comes to know about where the leakage of funds is and how to cover such leakage along with other financial managements.

Workload:          CFO needs to understand that audit committee keeps a close on all the major position holders like him, CEO, COO, etc so that they may keep intact with the goals and objectives of the company. CFO should focus his time and give valuable efforts on the operations leading in the finance functions. He has to interact with other board members of the company so that to formulate a better financial strategy. Normally, the CEO, other board members and the audit department / committee are viewing the CFO to guide them in all the financial matters / functions and makes the organization to the next level in terms of performance and achievement of short and long term goals.

Sharing information and plans: CFO should guide the boards of members and management through various steps that are needed to be implemented. These steps need to be clear, understandable and be allocated in all segments of the company. In case of one day briefing to all the board and throwing out the ideas to everyone at the instant just bring fruitful results. Similarly, very few of the same can also leads to no accomplishment of the desired outcomes. Therefore, all the steps should be identical to every director of the segment so that he is clear what he is supposed to deliver.

No identical information:            The board of Directors and audit committee is given with the plans and financial functions separately so that no same information is given to them. It needs to be clear to CFO that the information required by the board of members and audit committee is always on separate approach. Like for example, Marketing Director would be interested in focusing what would be best marketing method which is also cost effect whereas audit committee is interested in various controls that are not suitable within the financial functions.

Communication needs to be effective: CFO needs to be having a good relation with all the board members as well as with the audit committee. Within the company, there are different types of human resource working in the surrounding. Like in finance department, there would be young and energetic person’s deals the finances and taxation matters whereas in audit committee and board of members, they would be old age or retired professionals who don’t undertake the changes very freely. CFO has to deal with all these resources with the same tune and frame that is understandable and most importantly acceptable to them. Apart from communicating with the internal board, CFO required to convey the financial strategies to the shareholders as well so that their trust on company management’s policies keeps intact with their interest. They cannot be deemed into the dim rather they needs to be motivated to keep their share with the company and have faith that the company will keep on progressing. This belief is given by the CFO through his clear and frank conversation with them from time to time.

Be prepared for the uncertainties:          Board and management should always be aware by the CFO the negatives of the functions as well as any other threat that may affect the company. Good CFO’s never keeps them blindsided or in dark, they clearly identifies all the dark elements of the policy and should convey clearly that such thing can lead away from company’s objective. Not only this, he needs to bring out better and proper solution in order to overcome the bad policies or steps with modified and good approaches so that the confidence of shareholders is remained with the company.

 Research and various studies have shown that the companies get huge benefits from new or outside finance chief if joins the board and financial report is shown to him. The study reveals that he can bring many negative aspects into the limelight being having a diversified experience of the field.  It is, therefore, clearly stated that new CFO can be blessing for the organization and he  have to work as such.