The chief financial officer (CFO) is a corporate officer primarily responsible for managing the financial risks of the corporation.  This is the definition from Wikipedia (which is where everyone seems to get their explanations).

Do you think that "managing the financial risks of the corporation" is the PRIMARY responsibility?   I would argue that it is ONE of the PRIMARY responsibilities but certainly not the only one.  The explanation goes on to say the following:  "This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. In some sectors the CFO is also responsible for analysis of data".   Who writes this stuff?  Aren't we missing a number of key roles?

Another source, Investopia, had the following as the answer to the question (massively abridged, editors discretion):  Controllership duties, Treasury duties, and Economic strategy and forecasting.  Granted the article written goes on to say the following "The CFO's job is a very complex one. We have only scratched the surface of the many things this executive is responsible for. One thing is certain: a great CFO will usually differ from a good CFO by the way that he or she is able to project the long-term financial picture of the company and by how the company thrives based on his or her analyses."  Well we do not have the space to discuss the differences between a "great CFO" and a good one but maybe another article?

What do you think?  How would you define the job of a CFO?

David A. Fogel, CPA                                                                                                                                                                                           Coordinating Committee for the MIT Sloan CFO Summit

Principal, Swifton CFOs
Email: dfogel@swiftoncfos.com Twitter: @swifton  

I'm sure like me you are inundated with materials to read---financial reading, business reading, IT systems reading, etc.  I complicate it but getting too many content emails and too many magazines.  Granted, both the ridiculous number of emails and magazines are all free, the magazines come from frequent flyer points, but all they seem to do is pile up.  They either pile up in my inbox or in my home office----much to my wife's displeasure.

I am stricken with that age-old disease "I will get to it someday" expectation.  That disease is complicated by the "missing something" disease.  I always feel like if I don't keep that reading material and read it "someday" I will miss an important article or important fact.

I tried the........"if I do not read it within a month of publication I throw it away" rule.......but somehow the "missing something" disease overtook the "month rule" a long time ago.  Funny how the disease took over the rule.

I am sure the experts would simply say that if you do not read the materials within a few days (or earlier) you should throw it away.  But does that work????

David A. Fogel, CPA                                                                                                                                                                                           Coordinating Committee for the MIT Sloan CFO Summit

Principal, Swifton CFOs
Email: dfogel@swiftoncfos.com Twitter: @swifton  

Rounding is a headache.  Okay, I know that many of you larger company CFOs don't have to worry about rounding anymore.  You leave it to the Corporate Controller who has to have this headache (or many it is their senior accountant).

For those of us who enjoy working with emerging companies we still have to worry about whether or not the assets match the other side of the balance sheet since those wonderful pennies don't always seem to match on both sides once you round them up.

I'm one of those who believes that any financial statement should have the caveat note "numbers may not equal due to rounding" and leave it at that.  Why are we forced to spend a ridiculous amount of time forcing some part of the balance sheet, cash flow, or income statement into a number just so it adds up on paper??  Couldn't we be spending our time on something much more beneficial???

David A. Fogel, CPA                                                                                                                                                                                           Coordinating Committee for the MIT Sloan CFO Summit

Principal, Swifton CFOs
Email: dfogel@swiftoncfos.com Twitter: @swifton

Over the years my viewpoints on the economy have certainly moved more toward the right but I do not think that I was ever one to support significant government regulation over anything (with the exception of course of police, roads, schools, etc.).  I diverge from my concern over "big government" when it comes to funding for the Justice Department Anti-Trust Division.  Given the choice I would be certain that this group is well-funded because, as we saw with AIG, anti-trust issues are the achilles heal of free enterprise. 

If a corporation becomes "too big to fail" and for whatever reason, it does fail, then, as we saw with AIG the government is forced to step in and save the day!  We cannot let this happen.  The Anti-Trust folks in the Justice Department must have enough clout to keep corporations from becoming too big, too essential to the overall economy.

Okay the concept of a bunch of bureaucrats making determinations like this scares me too, but I would rather error on keeping the AIGs of the world too big then paying out bailout money to keep them in business.

Remember......these are my views and are not necessarily the views of MIT, the MIT CFO Conference, etc.  But, of course, any logical person would agree with me here, right?

Happy to hear of any contrary viewpoints.............

David A. Fogel, CPA                                                                                                                                                                                           Coordinating Committee for the MIT Sloan CFO Summit

Principal, Swifton CFOs
Email: dfogel@swiftoncfos.com Twitter: @swifton

So I'm reading the Business Week¹ edition of August 24 & 31 2009 which has the headline "The Case for Optimism (Is the Worst Over?)" and I’m surprised that the series of articles does not include the concept of a “self-fulfilling prophecy”.  I’ve been preaching the self-fulfilling prophecy concept since March 2009 when, as the optimist as I am, I believed that the stock market truly bottomed out (yes, I really did and moved some cash into the market).  

Why mope around like Winnie-the-Pooh’s Eeyore that everything is awful and that we are never going to be happy again when we KNOW everything is going to better sooner or later?  The turnaround is never as soon as we want but moping around is never the answer.  Why not push it along so that we can get through our mini-depression a little quicker?         

Why am I surprised about the non-reference in the Business Week article?  The concept of self-fulfilling prophecy is clearly a part of the optimist’s toolkit.         

Okay let’s make sure that we have a handle on the concept.  Of course we have to go to the highest authority of explainers, Wikipedia, for the answer.  What does Wikipedia say? ²  “A self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior.”  Am I missing something?  When we hit the doldrums of the bottom we have to believe that things will get better and then they will.                                                                                                                                                                                                                        Yes, I understand that you immediately respond…..that a self-fulfilling prophecy can work on the flip-side as well.  If you predict a disaster and you believe it to be true it can cause a disaster.  Yes this is true, but, the context here is why this concept is key on the upside and, further, why I believe it to be important.        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       The concept has been attributed to the economist Robert K. Merton who, in his 1968 book “Social Theory and Social Structure” discussed it within his Thomas theorem.  Unfortunately one of the better examples Merton cites is the downside, how a run on the bank can get started.  The counter is that we all remember from Management classes the “Hawthorne effect” where, when the workers knew they were being studied and watched, the factory workers worked harder.                                

For the past five months I have made a point to tell everyone that the economy is on the upswing so that, perhaps, we could start a viral message and provide that impetus for the economy could, in fact, be on an upswing.  Where is the tipping point?  Who knows?  Isn’t it worth a try?   

One could argue that the concept is a must for the tool-kit of an entrepreneur.  A successful entrepreneur has to be an optimist; otherwise against all odds they have no chance of success.  Of course the entrepreneur cannot not simply wish for something to happen they have to take all actions to make it happen. 

Join me in the optimist’s crusade…… our self-fulfilling prophecy, and let’s get the economy rolling again.

                                                                                                                                                                                                                       David A. Fogel, CPA                                                                                                                                                                                           Coordinating Committee for the MIT Sloan CFO Summit