19/05/2020 by MNV Associates
Choosing A Right CFO For Your Company in Dubai
From our experience in searching CFOs across different sectors in the UAE, we understand that this position is one of the most complex. Read on to find out about the immediate benefits of picking a good CFO for the company.
Benefits And Drawbacks Of Picking A CFO
Although selecting the right applicant for the positions is important, making the right choice for the CFO, who deals with crucial, challenging, and confidential information, is especially crucial. A strong CFO assists in making rational decisions, forecasting contingencies, evaluating risks and maintaining liquidity; Equally, selecting the wrong CFO carries considerable business and reputational risks.
When assessing a CFO 's range, questions are normal about the most suitable profile. To build a consistent and well-defined profile, it is important to provide transparent and relevant details such as: corporate strategy, scale, organizational complexity, customer typology, financial strategy, growth strategy, international presence, corporate structure, market sector, capital structure, funding and working capital sources/needs, and internal control practices.
Successes And Limitations In Employing A CFO
Here are some real examples explaining whether a CFO's hiring worked or failed.
Multinational growing business recently acquired by a private equity firm
It worked out, since ...
· The applicant had experience negotiating debt agreements; crucial because the company was heavily indebted
· Experience in IPOs; the investor anticipated an initial public offering with a emphasis on costs and working capital;
· The persona of the candidate suits well with the CEO of PE
· The client was able to pay generously
Subsidiary of multinational expanding transactions by acquisition
It worked out, since ...
· Although not from the industry, the applicant had experience with the same customers
· Working capital focus: collections and treasury
· Relevant English news practice and know definitively how
· Strong personal contribution and encouragement with the CEO
· Wage according to his standards
Reasons Companies Reject Applicants
There have been many factors why a firm may decide not to run with a candidate who appears to have the right experience. The most important of these are:
· Lack of access to debt arrangement negotiation and supervision.
· Does not understand client’s typology. This is critical for companies that are under pressure from working capital.
· From a market which is very special. The primary aspects of the industry are not easy to grasp if the candidate's background is in a very different field.
· Too young and getting so little experience. A CFO's job needs expertise and skills which are well developed.
· Lack of international exposure or English proficiency. This dimension is becoming increasingly relevant because of business globalization and company internationalization. As much of the funding is used in English-speaking environments where fluency and accent are relevant, it is even more relevant for a CFO.
· Does not fit the culture of enterprise.
· Lack of bargaining skills.
· Is not hands-on (the CFO's position has changed in recent years; a CFO is now more of a business partner ready to understand the business' variables).
Detailed Analysis Of The Scope And Strategy For The Company
In selecting the right candidate, the company's strategy and background are crucial, with the most crucial elements being:
Group size, organization, and organizational structure. · Presence at international level.
Strategy for growth: organics, acquisitions, geographies, new products and the market it competes in.
Processes of production and of trade.
Financial planning, control of money, ways to finance and taxation. · Income statement management: forecasts, expense estimates and margins. Control of balance sheets: Savings, cash and goodwill.
Risks Associated With A CFO's Bad Choice
The risk of choosing the wrong CFO is higher than for any other Steering Committee role. Those threats are:
· Loss of confidentiality; CFO is dealing with sensitive and confidential details about the product.
· Replacement: controls complicated administrative, numerical problems and procedures, making it impossible for the CFO to substitute.
· High pressure on results: chance of fiscal incompetence, excessive debt, weak capital structure, poor management of treasuries, poorly concluded deals, etc.
· The CFO represents the company in front of banks, auditors, public entities, and suppliers.
Keys To Selecting The Right CFO
To select the right CFO, attention must be given to both the technical and personal aspects. The professional aspects have to be defined in a profile which is associated with the company's obstacles, situation, and strategy. Personal aspects must ensure that the personality of the chosen candidate follows such core values, such as: reliability, hard work, dignity, commitment, tolerance, common sense, empathy, self-control, self-confidence, teamwork, and self-motivation.
In addition, the selection of the right CFO has three main aspects:
· Trust. The CFO must be able to inspire trust by displaying precision, company understanding, organizational skills, technological know-how and personal values.
· Craft. The CFO must have seniority and experience as well as extensive understanding of the sector / function.
· Profile. The profile of the CFO should be consistent with its duties and with the company's sector, situation, policy, size, and organization.
Why Select MNV Associates for Outsourced CFO in Dubai?
We’re way more than just a bookkeeper or accountant. We look at your business overall and provide the financial insight to assist you manage it better. Also, we work in hand with you and your finance team to make your business profitable. In long run CFO Services Dubai will help you achieve your long-term desires and keep financial control.
Our CFO Services can help you with: Implementation of Internal Controls, Cash Flow Management, Comprehensive Board Reporting, Business Strategy Formulations and Implementation, Financial Analysis and Reporting, Profitability Analysis, Annual Budget & Budgetary Control Measures and Risk Management.
At MNV Associates we offer multiple resources that will benefit your business. By utilizing our high caliber experts, we surely can help you anywhere in the UAE. If you are looking for assistance, contact our office at +971523750920 or schedule an appointment with our top-notch advisors.