Keynote address at the "CFO Strategies Middle East 2007" Conference, December 2007

1. Strategic R l of T d ’ CFO
S i Role f Today’s
The New CFO Agenda
Sanjay Uppal
Group Chief Financial Officer
EmiratesNBD
CFO Strategies Middle East 2007
3 – 4 December 2007
Dubai. UAE

2. Forces Shaping the CFO Agenda in Middle East
Meeting the demands of strategic stakeholder base
The
Th CFO Toolkit: Are you well equipped ?
T lkit A ll i d
CFO Agenda in the new economic order
1

3. Forces Shaping the CFO Agenda
Traditional changes continue to …However a l
H larger shift is occurring
hift i i
define and evolve the role of the due to a fundamental shift in
CFO … expectations from the role
Evolving
Market
conditions
Organizational ‘pull’
Regulatory to move from
changes CFO ‘Controller’ to
‘Strategist’
Growing
scope and
scale of
business
2

4. CFOs have traditionally had 7 core &
5 extended Finance responsibilities
Core Extended
responsibilities Description responsibilities Description
Manage financial controls Oversee administrative
1. Control & reporting 8. Administration functions (e g HR legal)
(e.g., HR,
2. Financial planning Plan & measure Manage corporate
& analysis performance management 9. IT infrastructure systems
3. Accounting / Report proper book Manage infrastructure
audit accounts 10. Operations operations (e.g., order
management)
Fulfill & optimize tax Lead & execute
4. Tax requirements 11. M&A transactions
5. Finance & Manage the use & sources Responsible for
Treasury
T of funds 12.
12 Strategy corporate & Business
Unit strategy
6. Governance & Ensure compliance &
compliance quality governance
7. Investor Manage investor
relations communications
3

5. CFO has been thrust into ‘Number 2 role’ :
CFO eclipsing COO & feeling pressure
COO position is declining as CFO becomes . . . turnover indicates increased pressure on CFOs
more important . . .
Total COO Positions* CFO Changes: 1994-2006
P bli C i ith Revenues >$1 Billi *
US Public Companies with R $1 Billion
600
500
225
400
300
200
200
100
0
175
2001 2002 2003 2004 2005 2006
94
95
96
97
98
99
00
01
02
03
04
05
e
06
19
19
19
19
19
19
20
20
20
20
20
20
20
30% of CFOs do not co e from
o C Os ot come o 75% of CFOs have less t a 5 yea s
5% o C Os a e ess than years
finance tenure
“The Chief Operating Officer is becoming an endangered species in corporate America. As that
p g g g p p
role goes away, more often than not, the CFO is being given all or part of those responsibilities
in addition to other duties—responsibility for execution, efficiency, performance, and
organizational design at the enterprise level”
– CFO, Consumer Products Company**
4

6. CFOs are moving to a more complex role…
From budgets to value creation
Controller Strategist
Primary Reporting on use of Developing and managing core elements
objectives financial resources of the business
Protecting financial Corporate/portfolio strategy
resources Investment strategy (M&A, business
Complying with development)
financial reg lations
regulations Financing strategy
Ensuring proper risk Acting as “Deputy CEO” & board member
management
Using financial tools to
g
gain strategic advantage
g g
Typical CPA Corporate development
background
Accountant / controller Line management
Investment banking / management
consulting
5

7. Forces Shaping the CFO Agenda in Middle East
Meeting the demands of strategic stakeholder base
The
Th CFO Toolkit: Are you well equipped ?
T lkit A ll i d
CFO Agenda in the new economic order
6

8. Stakeholders expectations from the CFO &
the finance organizations have increased...
• Strategic Business Counselor
• Integral part of management
team to support value/
wealth creation
• Identifies opportunities and
provides critical information
• Focused on and analysis to make superior
decision support operating and strategic
• Provides sound decisions
financial analysis
to management
• Focused on
processes and
• Dominated by risk minimization
reporting and
compliance
functions
Stage I Accounting II Controlling the III Planning & IV Integrated functional
manager business analysis excellence
Role Bean counters Process managers Business partners Value Managers
Key • Financial • Management • Performance • Superior decision
capabilities accounting reporting management support to invest wisely
• Tax • Analysis • Business development
• Audit • Enterprise risk
• Treasury management
• Provide thought
leadership
7

9. Leading-edge CFOs can showcase finance
as the driver of value creation
From To
Finance staff optimizes Finance creates tangible value for
around avoiding mistakes of business leaders by delivering select
routine processing / analysis pieces of insight & personally shaping
key business decisions
y
Finance staff seen as the Finance staff become the primary
“numbers guys” to have on option for driving initiatives within &
cross-functional teams across BUs
Finance supports business Finance actively orients the company
decisions made by the rest dialogue around shareholder value
of the management team creation
Finance resources seen as Line managers see Finance staff as
capable quantitatively, but prime talent pool for management
remain pigeonholed as “staff”
staff positions
people
8

10. Forces Shaping the CFO Agenda in Middle East
Meeting the demands of strategic stakeholder base
The
Th CFO Toolkit: Are you well equipped ?
T lkit A ll i d
CFO Agenda in the new economic order
9

11. Preparedness for the future
Are CFOs positioned
to effectively meet these demands
on a sustainable basis ?
10

12. Preparing for & managing this change
Organization
structure changes
Tools,
T l IT systems
t
&
processes Some
Personal
Perspectives
Skills & Capability
enhancements
Changes to
Performance
measurement t
11

13. Forces Shaping the CFO Agenda in Middle East
Meeting the demands of strategic stakeholder base
The
Th CFO Toolkit: Are you well equipped ?
T lkit A ll i d
CFO Agenda in the new economic order
12

14. Forces shaping the CFO agenda
IAS / IFRS
Economic
Environment
Cost
Reduction
Global Capital CFO
Markets
Agenda
Corporate Disclosures
Governance
Basel II
13

15. CFO : The new economic agenda
Cost Efficiencies &
Shareholder Value
Enhance
E
Financial People, Processes
Transparency Drive Transform
& Technology
Effective
Eff ti Finance function
Risk Management into business
Approach operations
14