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PODCAST: the strategic role of CFOs

To be an effective Chief Financial Officer, it’s important to understand and explain the numbers. But also, today, become more active in delivering an institution’s strategy and critically managing capital allocation.

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I recently started my new role as ANZ’s CFO and am looking forward to my first opportunity to not only discuss the bank’s numbers at our upcoming full year result but also bringing to that task the perspective of a long term banker.

“The expectations of a CFO, whether it's from the board, shareholders, customers or the CEO has really shifted in my professional lifetime.” – Shayne Elliott

One of the greatest challenges for a CFO is communicating our strategy and narrative effectively - with clarity and a clear view of what our vision is into the future. So shareholders understand how we are creating long-term value.

As part of the recent ANZ Finance & Treasury Forum (AFTF), I sat down with ANZ CEO Shayne Elliott – albeit virtually from Hong Kong – to discuss his expectations for my role, what his experience as CFO taught him and how we can work together to drive good outcomes for our people, customers and shareholders.

You can listen to our conversation in the podcast below.

Click here for a transcript of this podcast

I was particularly interested to chat with Shayne as I take this next step in my career given he was ANZ’s CFO – a role he describes as a bit of an “accident” - before taking on the role of Chief Executive.

“The expectations of a CFO, whether it's from the board, shareholders, customers or the CEO has really shifted… in my professional lifetime to [being] the right-hand person to the CEO,” Shayne explains.

“The person who is influencing outcomes, the person allocating resources actively - not just reporting them. Thinking through the impact of those decisions, holding businesses to account.”

I personally think it’s very interesting to see how the role of a CFO has evolved and changed over the past few decades and I know it will continue to shift the way I think about the role going forward.

Shayne explains a deep experience and understanding of the business, such as how a decision made at head office can impact someone in our branches or in a customer-facing role, is really important – and is something he thinks I will bring to the team in my role.

Shayne and I also discussed the importance of focusing on more than the traditional “cold, hard numbers” of finance but instead developing a broader understanding of the organisation’s performance with environmental, social and governance (ESG) measures.

“Understanding… more than just the numbers and how that really manifests… our impact on the community - that's really a big area for contemporary CFOs today and in the future,” he explains.

He also says a strong handle on the competitive environment is incredibly important for any CFO: “Our industry is facing massive disruption and there are opportunities that comes with that. [The CFO] needs to be an enabler of that and somebody who's leaning in and helping the company allocate resources, ensuring we're investing in the right places and… being a positive influence on change and transformation.”

For me, having empathy and understanding of the business and driving operational efficiency is really important. It’s about partnering with internal stakeholders to deliver outcomes as well as reporting to the market and our shareholders.

Shayne says one of his biggest lessons from his time as CFO and now CEO is the importance of bringing our people, customers and shareholder along the bank’s transformation with a clear narrative.

“It goes to the heart of what you stand for as an organisation,” he says. “Why, as a shareholder, am I giving my capital to ANZ? What do I get beyond just a dividend?”

“I think that narrative is critically important. The challenge for a CFO and a CEO is crafting that narrative, particularly in a large, complex, somewhat diversified business like ours.”

I completely agree with Shayne when he says the role of the CFO is to hold the business to account and find proof points that go beyond the quarter-on-quarter figures. That will be a prime focus for me.

These are long-term ambitions. But we do need to continue to improve our communication with shareholders around the alignment we are building with that central narrative.

The concept of long-term value is something I am particularly focused on as CFO and is something, I believe, that takes a little bit more courage than just delivering short-term.

This focus on long-term value has been at the heart of the bank’s strategy over the past five years. I’ve seen it and Shayne points out the value that has for our value.

“We’ve been building credibility as a management team, strengthen our operations, outperforming our balance sheet,” he says. “So we share a little bit back to shareholders in terms of dividends, conducting share buybacks and capital management to strengthen the bank, build resilience and to invest ahead of the curve.”

You can listen to our whole conversation by clicking on the podcast above.

Farhan Faruqui is CFO of ANZ

This article was adapted from a session at The ANZ Finance & Treasury Forum which returned for its fourth year in 2021, held virtually across two days in October.

 

ANZ Institutional Insights provides coverage and insights into the key themes from the forum and beyond.

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