Professional Development Tool: The CFO Readiness Assessment

CFO.University developed the CFO Readiness Assessment™ to measure the four primary proficiencies that drive the success of Chief Financial Officers. We call these the Four Pillars:

  1. Accounting
  2. Finance
  3. Treasure
  4. Leadership

Each pillar is further broken down into a number of core competencies, which are also part of the assessment. The Four Pillars and their Core Competencies include:

ACCOUNTING

Accounting is the foundation on which the other three pillars of the Chief Financial officer role are built. Double entry book-keeping was developed over 500 years ago. Its key principles are still in practice today. Accounting is both an art and a science; a common language for business whose evolution improves the understanding and speed of commerce.

  1. Governance and Internal Control:The initial and ongoing legal documents that give structure and rules to an entity as well as internal controls to protect corporate assets and reduce the risk of incurring unanticipated liabilities.
  2. Recording:Record keeping, transaction processing and closing the books are the foundation for creating useful internal information about your business.
  3. Reporting:Financial and managerial reporting should result in information you can trust and create transparency into business operations. It should also help you comply with laws, rules and regulations.

FINANCE

Finance uses the discipline and data from a strong Accounting team as the launching pad for planning and creating their company’s future. A seamless handoff between the Accounting and Finance departments is critical in creating and executing an effective strategy. The Finance function is about creating the optimum analytical framework to make strategic decisions.

  1. Budgeting and Planning:The first building block of a finance department is to provide the financial roadmap for the company based on the direction agreed to by the Board of Directors and the Executive team.
  2. Forecasting:The forecast integrates the company’s current performance relative to budget with the real-time business environment. Learning what is creating differences between the budget and forecast is one of the most valuable insights we can give the company.
  3. Investment Analysis:Creating a common framework to analyze new opportunities and benchmark current operations is the goal of investment analysis. Capital projects, such as an acquisition, building a new plant or licensing technology should be evaluated under a common set of financial criteria to make effective capital spending decisions.

TREASURY

Treasury is the pillar of the CFO function that provides the discipline and fuel to manage and grow a company’s capital base. Treasury encompasses three critical aspects for long term business success; cash management, capital raising and risk management. A successful CFO has the capabilities to effectively lead each one.

  1. Cash Management: Cash management is the discipline designed to provide comfort to the stakeholders that cash is available to operate the business normally. It includes daily activities such as balancing the checkbook, processing credit card transactions, and reconciling cash accounts.
  2. Capital Raising (funding): Funding can come in many different forms; operating cash flows, terms with suppliers or customers, loans or lines of credit, and raising equity. Each form has different costs and risks but the objective is the same – provide the company with enough liquidity to execute your plan with some cushion for variability.
  3. Risk Management: The demands and rigor associated with effective cash management are a natural extension to solid risk management practices.

Risk management also includes insurable risks, for example; property and casualty, business interruption, employee benefits, labor strife, cyber-attacks and fiduciary risk. In addition, there are uninsurable risks, risks that can’t be underwritten by a normal insurance company. Risk management is a close cousin of the Governance competency in the Accounting Pillar.

LEADERSHIP

Leadership is the act of inspiring others to engage in achieving a goal. At CFO.University we view leadership along a spectrum that begins with the individual, grows through building teamwork skills with strategic leadership being honed after these two building blocks are firmly in place.

  1. Internal – Self-Awareness:The way we see ourselves is different than the way others view us. Narrowing that gap is a huge step to improving relationships and expanding your influence. Think about all the time that could be saved resolving issues if we could perfectly describe them, have all parties perfectly understand them and resolve them in perfect harmony.
  2. External - Teambuilding: Using your leadership style to build teams: Building trust and creating a safe space for members of a group to practice and refine their discipline is foundational to developing a well-functioning team. That doesn’t mean all is harmonious. In fact, contention is a requirement for real learning and growth. An effective leader helps the team debate and learn in a respectful, benign atmosphere.
  3. Strategic and Culture: Leadership that motivates people to follow you: It is easy to confuse authority and power with leadership. To truly inspire an organization requires a vision and communication that rallies folks behind a common cause. Your authority provides a platform to deliver your message, but the communication of your vision is what creates strategic leadership.

Why take the CFO Readiness Assessment ?

  • To determine where your investment in CFO skill development will have the highest payback. (Great ROI)
  • To receive a personalized report that will act as a road map for your professional growth journey. (Lays out a plan)
  • It takes only 10 minutes to complete. (Super-efficient use of your time)
  • The assessment questions are straightforward and easy to answer…the results are easy to interpret. (Clear direction on next steps)

Take the CFO Readiness Assessment Now

The assessment is assisting financial executives worldwide to determine where to allocate their time and resources for professional development and growth. We are thankful many are choosing CFO.University to help them.

We look forward to supporting you on your professional development journey.


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