Module- Background
The Role of the Financial Manager
Required Reading
Banking and Finance (2015) Pearson Learning Solution, New York
Financial Statements (2015) Pearson Learning Solution, New York
Financial Managers (n.d.) Retrieved from https://www.ncbuy.com/careers/blsj/job010.html
Kowalski, R. B., & Campbell, M. W. (2000). Leadership skills help financial managers achieve career success. Healthcare Financial Management, 54(4), 50-52.
Optional Reading
Finance and Accounting. Retrieved from MBA.COM/US. This website provides descriptions of finance careers. Click the links below:
https://www.mbs.ac.uk/masters/courses/accounting-finance/
https://businessmajors.about.com/od/specializations/a/BizMajorsFinanc.htm
A British description of the role of the financial manager. Retrieved from https://www.prospects.ac.uk/sectors.htm
Gray, C. (2000). What does it take to become a CFO? Journal of Accountancy. Retrieved from https://www.journalofaccountancy.com/Issues/2000/Dec/WhatDoesItTakeToBecomeACfo.htm
About.com. Glossary of Financial Terms. Retrieved from https://bizfinance.about.com/od/glossaryoffinanceterms/
Financial Managers: Occupational Outlook Handbook (2012). Bureau of Labor Statistics. Retrieved from https://www.bls.gov/ooh/management/financial-managers.htm
Why Finance Matters: Chapter 1 (n.d.). Retrieved from https://www.public.asu.edu/~atmxh/fin361/ch1.pdf
Picker, I. (Aug 1989). Do CFOs Really Make Good CEOs, Institutional Investor, 23(9), 47.
Abstract:
With the proliferation of corporate takeovers, leveraged buyouts, and restructuring in the US, it would seem that chief financial officers (CFO) hold the keys to executive wisdom. Recruiters report a growing trend of grooming CFOs for chief executive officer (CEO) positions, with some estimating that nearly 25% of top corporate leaders are former CFOs. Analysts, academics, and headhunters agree that the ideal CEO communicates well, is adept at managing managers, understands the company's product and operations, and provides a consistent vision. A recent survey by Management Practices Quarterly reveals that, of 83 new CEOs appointed in 1988, more than 18% came from operations-production backgrounds, some 23% had technical training, while only 14.4% had a financial background. D. Wayne Calloway, who became CEO of PepsiCo in May 1986, was formerly the company's CFO and is probably the best example of the valuable experience CFOs can bring to the CEO position.
Leadership skills help financial managers achieve career success
Healthcare Financial Management; Westchester; Apr 2000; Robert B Kowalski; Manie W Campbell;
Abstract:
Financial managers who want to distinguish themselves and their organizations need to demonstrate their leadership ability. Because financial managers sometimes overlook the need for leadership skills, cultivating mentors who can teach them specific leadership skills, such as improved communications and entrepreneurship, may be necessary.
Health-care financial managers can sharpen their leadership skills by distinguishing between leadership and management, adopting a new mentoring model, evaluating the usefulness of new management techniques, understanding the connection between technology and leadership, looking for the solution beyond the problem, and being seen and heard within the organization.
Module- Case
The Role of the Financial Manager
Assignment Overview
Due to the increasingly complex nature of corporate finance, more and more corporations are tapping their chief financial officer to become their chief executive officer. The CFO brings substantial financial expertise to the position of CEO. However, there may be other reasons why the CFO is not necessarily the best person to become the CEO.
Please note that the CFO must have an external orientation: After all, the company is owned by its shareholders and if the company is to operate so as to raise the value of the shares it must consider not only the internal structure of the organization, its products, competitors etc., but it must consider the interaction between what the company 'does', and the way the 'market' evaluates its performance. It is the combination of the two that plays a role in affecting the market price of the shares and shareholders value. The individuals who must have an eye on this are usually the CEO and the CFO.
Please read the articles below, which are both available in Proquest. You need to click ‘ADDIONAL LIBRARY RESOURCES' under the title of Online Library in the TLC Portal in order to access the links.
How a CFO can graduate to CEO
Corporate Finance; London; Jun 1999; Janine Brewis
Abstract: Positions of power within corporates are highly sought after, and today's chief financial officers and finance directors are increasingly becoming aware that they now have a realistic opportunity of becoming CEO. Part of the reason for the trend towards recruiting CFOs who can behave as strategic partners is that the investor community looks much more critically at the business performance and management strengths and weaknesses of corporates. This strategic positioning gives them an opportunity to buff up their image, and make themselves seen as a more credible candidate to take over the CEO role.
Do CFOs Really Make Good CEOs
Institutional Investor; New York; Aug 1989; Picker, Ida
Abstract: With the proliferation of corporate takeovers, leveraged buyouts, and restructuring in the US, it would seem that chief financial officers (CFO) hold the keys to executive wisdom. Recruiters report a growing trend of grooming CFOs for chief executive officer (CEO) positions, with some estimating that nearly 25% of top corporate leaders are former CFOs. Analysts, academics, and headhunters agree that the ideal CEO communicates well, is adept at managing managers, understands the company's product and operations, and provides a consistent vision. A recent survey by Management Practices Quarterly reveals that, of 83 new CEOs appointed in 1988, more than 18% came from operations-production backgrounds, some 23% had technical training, while only 14.4% had a financial background. D. Wayne Calloway, who became CEO of PepsiCo in May 1986, was formerly the company's CFO and is probably the best example of the valuable experience CFOs can bring to the CEO position.
Assignment Expectations
Read the two articles above, look for newer articles on the subject by browsing the web and then write a two-page paper answering the following question:
Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?
Include a discussion of both the pros and cons of hiring a CFO to be CEO. Try to cite at least three articles in your paper in support of your arguments in favor of and against hiring a CFO to be a CEO. Remember to include a reference list and to refer to the articles you use in the body of your paper.
Module- SLP
The Role of the Financial Manager
For this assignment, go to the Yahoo Stock Screener and use this page to find a publicly traded company that you find interesting and would like to study for this class. The company should not be a bank or a financial institution of any kind including insurance companies.
SLP Assignment Expectations
Write a two to three page paper discussing what you find interesting about this company, and whether or not you think this company will have a successful future. Get to the company's web site, into the "investors relations" section and provide some financial highlights of your company for the past year. Indicate which stock exchange the company is listed on and what was the past 12 month rate of return (% gain or loss) to investors who bought shares of this company a year ago and sold the shares yesterday. This rate of return is called the one-year Holding Period Return, or HPR. Also state what is the most recent price of the shares on the company?
In addition discuss briefly some information about the top management team including the CEO and CFO. If there are any issues involved with the company that relate to the issues discussed in the case assignment, mention them briefly as well.
There has been a trend across corporate America of promoting financial officers to CEO. What are some advantages and disadvantages of this practice? (Based on the article of Financial Managers and other reading you may have done)
Do research on the Internet and show the reference for the information. Don't forget to respond to a colleague's posting also.
Professor's Note: In addition to searching the Internet for text related to this threaded discussion, please watch the following videos (click on the following link to access these videos) and post your comments.
https://www.youtube.com/watch?v=E2GxuhDRVYg David Mudrick - CFOs Becoming CEOs
https://www.youtube.com/watch?v=y5HkWah-bfs Ron Gaboury - CFOs Becoming CEOs