You're already busy if you're a CFO, but more issues are always crying out for your attention. If you can fit these suggestions into your schedule, your finance department--and your organization--may be better off.
Link enterprise risk management (ERM) to strategy. Nearly one-third (31%) of companies have a complete ERM process, compared with just 9% nine years ago, according to an annual survey on the state of risk oversight conducted jointly by North Carolina State University and the AICPA. The progress toward a mature ERM process is a positive step. But less than 20% of survey respondents view their risk management process as providing an important strategic advantage. Mark Beasley, CPA, director of the N.C. State ERM Initiative, said companies may have pockets of sophisticated risk management in place, such as compliance with air traffic rules for airlines, but they still don't have a holistic ERM process that is considered when strategy is discussed. By linking ERM with strategic planning, organizations can more fully reap the benefits of a process that can help with responding to threats and taking advantage of opportunities.
Consider the benefits of a chief risk officer. The portion of organizations designating an individual to serve as a chief risk officer (CRO) or in an equivalent position has grown to 48% in the most recent N.C. State/AICPA survey, compared with just 18% nine years ago. Over the same period, the portion of organizations with a management-level risk committee has grown to 59% from 22%. CFOs sometimes take on CRO duties themselves and can also serve in important roles on management-level risk committees.
Evaluate hedging opportunities. A new hedge accounting standard issued by FASB is designed to align accounting rules with risk management activities, more accurately reflect the economic results of hedging in the financial statements, and...