Being Global Has Its Challenges


As Seen in CFO Studio Magazine Q3 2016 Issue



In today’s global economy the role of a CFO is more complex than ever before. Successful CFOs must be able to operate in markets all over the world, with different currencies, cultures, time zones, tax structures, and regulations.

This was the basis for conversation during a recent World-Class Companies CFO Dinner Series event, entitled, “Challenges, Opportunity, and Driving Growth in a World-Class Enterprise; CFO Optics and Insights.” The evening was hosted by CFO Studio and the discussion leader was Richard Veldran, CFO at business-to-business data provider Dun & Bradstreet. Mr. Veldran manages a global finance team of 450, doing business in more than 200 countries.

“The global landscape and the challenges of increased regulations outside the United States were foremost in the thoughts of the CFOs who attended the dinner,” Mr. Veldran said in an interview.

Heightened regulatory requirements are having an enormous impact upon the role of the CFO, and Mr. Veldran has a unique vantage point on the challenges companies face complying with myriad new regulations that differ by country. Dun & Bradstreet has compiled the world’s largest commercial database, with information on more than 250 million businesses around the globe. The company supplies some of the largest global organizations with the tools they need to help them manage compliance on a global basis.

“Compliance is a new, fast-growing area of our business. With our vast global database and expertise in identity resolution we help companies with compliance regulations from KYC (know your customer) to FCPA to FATCA,” said Mr. Veldran, referring to foreign regulatory and tax compliance.

It’s no surprise that in this evolving regulatory environment the relationship between the CFO and the general counsel has taken on added importance. The general counsel is responsible for all aspects of regulatory compliance, and the CFO must manage all risk across the enterprise, including regulatory risk.

“CFOs are tighter with the general counsel than ever before,” said Mr. Veldran. “As the regulatory environment has gotten more intense, the chief financial officer and the general counsel need to help each other to manage risk so they can maximize the growth of the company. The bond between the two of them has become stronger than ever.” Conducting business across the globe brings increased complexity to the role of the chief financial officer.

High Stakes Regarding Talent

“We live in a world where the actions of one rogue employee could cause enormous financial upheaval for a company. It’s not possible to be everywhere at once when managing global operations. CFOs must make sure they are operating with a robust system of controls and oversight in place,” says Mr. Veldran. At Dun & Bradstreet, enterprise risk management is embedded in every function throughout the company, reaching well beyond the Finance and Legal departments. All business leaders recognize that they need to manage risk to achieve their performance goals.

With such high stakes it is important to have a team in place that is both educated and accountable. A discussion of talent-related challenges followed, with the major issues being acquiring the best talent, developing the individuals, and having measures in place to retain them for the long term.

“Talent retention is of the utmost importance, especially in large, complex, global organizations,” said Mr. Veldran.

Technology and the Customer

Modern financial management systems are providing instant insight into the full value chain of a company, agreed the participants. This goes beyond the four walls of the organization and gives access to customers, suppliers, banks, and the entire workforce, including external and contingent employees.

To better serve customers, Walmart, for example, uses innovative technology to track inventory, said Henner Schliebs, Finance Expert and Vice President at SAP, a CFO Studio Business Development Partner. “On Black Friday, Walmart optimized West Coast store shelves based on the East Coast early-morning experience and predictions [for Black Friday sales]. This is only possible with 21st-century technology,” explained Mr. Schliebs.

Customers are expecting a fully digital experience, he added. “A leading consumer brand enables its customers to find a song on the Internet, download it instantly, and have shipment and invoice/collection automatically embedded into the whole process. And again, it’s only possible with modern technology in real-time,” he said.

Real-time business intelligence like this is the way of the world. It’s also a defense against disruptive technologies and business models, said Mr. Schliebs. “Live business is imperative in all finance-transformation programs, especially as the threat of the next Uber-ization in all industries is high. A strong CFO has to be empowered to lead the strategy of a company,” said Mr. Schliebs.

A global real estate services firm, is hearing of these same issues from its clients. “Not only is retention critical, but locating solid percentages of targeted labor is also very important. Providing real-time technology tools that allow our clients to optimize their workforce-segmentation model and screen locations through high-level labor analytics helps us to support them in talent requirements,” explains Andrea Van Gelder, International Director.

At the dinner, which was held at Morton’s The Steakhouse in Chicago, the camaraderie was evident as all the attendees remarked on how similar their circumstances were. The very complexity of the finance and operational processes in business today “make a live environment and the real-time insights offered at this dinner very satisfying,” concluded Mr. Schliebs. “[Such insights are] a must-have in all aspects of the CFO role, specifically in combination with the need for a truly global solution (local compliance) focused on the particular industry (vertical compliance) and risk management embedded in any finance process.”

Copyright 2017