Sharing the Road


As Seen in CFO Studio Magazine Q3 2019 Issue


Founded over 100 years ago, Oak Brook, IL–based Chamberlain Group (CGI) is a leader in access control solutions with its Lift Master and Chamberlain garage door openers powered by myQ connectivity. Earlier in the year, this household name in homes (and businesses) around the globe joined forces with Amazon to provide package delivery into the garage, whether or not anyone is home to hit the clicker and open the door. And, like most things these days, it all happens in an app and on a phone. “Th e world is changing rapidly,” says CGI Chief Financial Officer Brendan Gilboy, “and trying to stay ahead of that change is really the most exciting part of my job.”

Gilboy, who’s been with CGI, a privately held company with more than 6,000 employees worldwide, for just over a decade, “developed the original financial model that was used to frame the discussions about what a win-win proposition looked like from a CGI perspective.” As for Amazon’s viewpoint: “Based on our experience,” he says, “Amazon looks to partner with folks who enable their vision of being the Earth’s most customer-centric company. Packages delivered safely and securely to the garage is truly a customer-centric solution.”

Gilboy is proud to have played a role in this new-to-the-world innovation, and believes a CFO can make the most significant workplace impact as a business partner and co-visionary to the CEO. “Continued focus on being a key element of setting company strategy is an important aspect of the ongoing evolution of the office of the CFO, moving from a numbers-only game to the position of the CEO’s right hand.”

But, with companies like Amazon disrupting the pace of business, such a partnership is not without its challenges. “You have that tension of making sure things get done right while moving quicker than the rate of change in the world,” notes Gilboy. It’s akin to speed walking on a tightrope, he says, but it’s all in a day’s work.


Office Culture
According to Gilboy, “the biggest challenge for any CFO is—and should be—actively supporting and, most importantly, guiding the company to support creativity and innovation focused on end consumers, while driving shareholder value creation by ensuring mind share and resource devotion is focused on greatest impact.” However, that doesn’t mean, he continues, that every good idea can be pursued.

“One of the most beneficial contributions a CFO can make at his or her company is to drive a day-to-day leadership strategy in which a culture of honesty and critical thinking wins the day and emotion does not.” Gilboy explains that such a culture is achieved when attention is focused on an honest assessment of what the data portrays. “This leads to tough, but objective, decision making, and it ultimately forces the team to pivot and move on to the next thing, instead of chasing ideas that aren’t going to pan out.”

Gilboy says the office of the CFO can foster this type of culture by maintaining a stance that “every ‘no’ is one step closer to a ‘yes,’ ” and by openly celebrating successes and “ideas that stick” so people feel good about being part of a winning team. And, most importantly: “By leading a team that clearly articulates a vision, and then a mission, of how we’re going to pursue that vision, so people can start with what the
bull’s-eye looks like and go from there.”


Top Teams
Gilboy, who spent two decades in public accounting at KPMG before sett ling in at CGI, believes he’s been able to propel his position to that of strategic and visionary “right hand” by forever focusing on being part of, and then building, great teams: “teams that were very performance focused, that understood what the goal was, and that went about achieving it.” Gilboy suggests CFOs zero in on people, and on trying to hire the best team possible. “At the end of the day, it’s a war for talent, and you need to build a team that makes the company better.” Th e CFO needs to lead that team to demonstrated results. “Not just financial results,” he notes, but “accomplishing
whatever the objective is.”

Furthermore, considering so much time is spent on data-driven insight, CFOs can seize the opportunity to play a more active role in shaping the next best move to create shareholder value by “shepherding the emerging trends of big data and predictive analytics in that context.” Gilboy recommends CFOs get up to speed—yesterday—on how such capabilities can add value to a company and how to build them into an organization. “In today’s world of rapid change and increased efficiencies, you have to work hard and smart.”


The End Game
As a strategic and visionary partner to the CEO, Gilboy is playing an active role in keeping the Chamberlain Group one step ahead of the times as it takes “access solutions,” a space where the company has a tremendous legacy, and redefines what that really means. “As a result, we’re transforming CGI from a manufacturer of products for the past century plus into an Internet-of-Things solution provider.” That, he says, is “very exciting.”

Although he’s far from retirement, Gilboy, 54, says the success he relishes the most is watching people he’s hired develop in their careers. “Seeing them flourish, starting their own consultancies and businesses because I gave them the opportunity, or coached them, and they rose to the challenge, it’s a tremendous compliment.”

And knowing that, eventually, their new flat-screen TV will be safe and secure in the garage, instead of out in the rain on the front porch—or worse, in the back of a getaway car—is just the icing on the cake.

Financial Risk


As Seen in CFO Studio Magazine Q1 2017 Issue


-BY WALTER CIRILLO, Treasurer, Novitex Enterprise Solutions, Inc.


During the last global economic downturn, many companies were caught unprepared by the speed at which events impacted their business. Many CFOs asked questions like, What is our current cash balance globally? In which financial institutions are these balances invested? and, What is our counter-party risk?

Companies with centralized treasuries typically had better visibility and information relating to these questions. However, decentralized treasuries deliver other benefits for many companies.

Will a centralized or decentralized treasury function be best for your company? That depends on the nature of the business. Factors such as global geographic footprint, the similarity of business operations across geographies, and management’s philosophy all weigh in this decision.

Pros and Cons

Treasurers are responsible for managing a company’s assets and liabilities, financial risks, and banking relationships. For businesses with operations around the globe, managing these components is complex.

Some of the benefits of a decentralized treasury structure are: (1) Flexibility, as local operating units or subsidiaries manage treasury in line with local conditions, and the solutions are specific. (2) Knowledge of local markets provides advantages for selecting appropriate debt or investment vehicles, foreign exchange hedging instruments, and banking partners. (3) Local staff may have more intimate knowledge of local regulations, and business/legal/tax/banking environment. (4) Local staff likely takes pride in managing all aspects of the operations.

On the other hand, some of the benefits of a centralized treasury structure are: (1) Economies of scale. (2) Rationalization of costs. (3) Standardized cash flow forecasting. (4) Identification of company’s cash balance and risk. (5) Closer control over investment performance and risk. (6) Greater access to financing and liquidity. (7) Ability to leverage banking and other relationships. (8) Local staff can focus on growing the business.

A particularly strong argument for a centralized treasury is that such a structure allows integrated payables and receivable solutions to achieve straight-through processing, which can help improve a company’s working capital position.

Consider Specifics

A centralized treasury structure seems more efficient, but a key question to reflect upon is leadership’s philosophy toward managing the assets and liabilities of the company. A company’s specific situation, such as degree of international presence, type of business, growth prospects or business cycle, sophistication of ERP system, availability of Treasury Management System, and external factors (global/regional financial crises), all play a role.

Facilitating the trend toward centralization is technology (more sophisticated treasury workstations interconnected with ERP systems), as well as legislation or regulatory changes (i.e., the Eurozone’s move from national payment instruments to SEPA, Single Euro Payments Area, and easing of controls in several emerging markets), and globalization of markets.

However, centralization is not without its challenges. Treasurers need the communication and cooperation of local staff to provide valuable knowledge and information on local rules and regulations. Ultimately, the company that implements a centralized treasury approach will likely be better prepared to manage the risks of the global marketplace.

Principles for Growth


As Seen in CFO Studio Magazine Q1 2017 Issue


Dominic Caruso, CFO of Johnson & Johnson, told CFOs gathered at a recent CFO Studio Reception held in his honor that the company bases all its important decisions on the Credo that General Robert Wood Johnson II wrote in 1943. But he said he realized that the audience might be a little bit skeptical. They might wonder “How stringent are you? Do you ever bend? Do you ever flex?”

“We do flex these principles,” he said. “We constantly challenge ourselves. We go to Credo challenge sessions to make sure we understand what [the Credo’s wording] means in the new environment.…But we generally stay pretty close to those principles.”

He noted that the Credo is “not an aspirational statement,” but a set of responsibilities by which “we live our lives at Johnson & Johnson and make business decisions.”

Each of its four paragraphs talks about “what we must do for each of our constituencies.” First, for patients; then for employees — their welfare and careers; next for the communities where the company lives and works around the world; lastly, for shareholders. General Johnson was a shareholder, “and he placed himself last.”

Mr. Caruso said that the 32 consecutive years of adjusted earnings growth that J&J has returned is “the proof in the pudding” that the company’s firm principles are properly guiding J&J through turbulent times and changes in economic circumstances.

An attentive group of around 60 finance leaders from New Jersey and the tri-state area formed the audience at the Heldrich Hotel in New Brunswick, NJ. CFO Studio Publisher Andrew Zezas introduced Mr. Caruso, who was profiled in the Q4 2016 cover story, stating that under Caruso’s stewardship, Johnson & Johnson has strengthened and built upon its position as the world’s largest and most diversified health care company.

“During his 10-year tenure as CFO, Johnson & Johnson’s share price has appreciated over 90 percent,” said Mr. Zezas. “Speaking as a shareholder, thank you, Dominic.”

Finance’s Pillars

In his remarks, Mr. Caruso said, “I owe a lot of credit to my predecessors. I’m fortunate to be in a long line of previous CFOs at Johnson & Johnson who have done outstanding work.”

He went on to enumerate the four principles by which J&J’s Finance organization operates. These are: to drive competitive profitable growth, generate sustainable cash flow, allocate capital to maximize shareholder value, and manage enterprise risk.

Regarding that third principle, allocating capital to maximize shareholder value, Mr. Caruso said, “We have very strict principles by which we do this. We have a set of hurdle rates and analysis that we use to ensure that each decision we’re making is maximizing the value that we set for the deployment of our capital.”

Mr. Caruso runs a global finance team of 5,000. He spent part of his time at the microphone discussing the role of “the great financial people at Johnson & Johnson.”

Finance professionals at J&J “are asked to do three things,” he said: “To drive sustainable, superior financial performance. And, I say that very clearly: to drive it, not to monitor it, or to measure it, or to report on it. To actually drive it. They’re also asked to develop great leaders,” he said. “And they’re asked to do one more thing, which is without compromise the most important thing that they do: To assure the financial integrity and compliance in what we do as a finance organization for Johnson & Johnson.”

Mr. Caruso and the finance leaders at J&J have assured the company’s financial integrity such that Johnson & Johnson remains one of two companies in the world with a AAA credit rating. The CFOs in attendance gave him rousing applause for that accomplishment.

Copyright 2017