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Quest For The Best
The Yes Bank BW Businessworld Best CFO Awards 2015-16 will acknowledge 16 winners across 10 categories
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Gone are the days when the key responsibility of a company’s chief financial officer (CFO) revolved around finance, accounting and the investment activities of the organisation. In today’s India Inc., the CFO is not just a key stakeholder in steering the growth of his company, but the nerve center of business operations.
The role has thus transitioned from the traditional functions of controlling finance and accounts of an organisation to being central to the execution of corporate strategy — both organic and inorganic. The CFO over the years has increasingly become the chief flag bearer of corporate transparency, governance and corporate social responsibility of the company he or she represents.
To recognise and acknowledge the exemplary achievements and the professional contribution of such esteemed CFOs, YES BANK, India’s fifth largest private sector bank, and BW Businessworld have joined hands to launch the YES BANK BW Businessworld Best CFO Awards 2015-16. The winners (16 awards across 10 categories) will be revealed at a glittering ceremony that will take place in mid-April. Some of the categories are Leading CFO-PSU, Leading CFO-MNC, Best Woman Leader CFO, Best CFO For ‘Creating Shared Value’, CFO For ‘Orchestrating the Best Inorganic Growth Strategy’ and ‘Overall Champion CFO’ among others.
How It Works?
A consideration set comprising top 500 companies from BW 1000 list (2015 edition:total income + total assets ranked) and top 500 companies by market cap in the financial year 2015 (FY15) was made. The financial performance in FY15 formed the basis of segregating the companies. The list, however, does not include companies in the banking, financial services and insurance (BFSI) sector and those where CFOs belong to the promoter’s family.
First phase (Phase-1) of quantitative analysis comprised shortlisting companies on the basis of consolidated financials for FY12-FY15. The list was segregated into large companies (net sales over Rs 3,000 crore) and mid-sized companies (net sales under Rs 3,000 crore); public sector undertakings (large/ medium threshold modified to Rs 10,000 crore) and MNCs (controlling stake held by a foreign company and not headquartered in India).
The analysis was performed basis data provided by Capitaline Databases (Capital Markets). The analysis of the company financials was done along three parameters: sustained value generation, leverage management and liquidity management. In order to factor in sectoral nuances and differences in characteristics, a peer set comparison was undertaken and top performers from each sector were shortlisted for the next phase of evaluation. For M&A, companies from the base set that completed merger in FY 15, were considered. For the Woman CFO category, it was noticed that women leaders at the CFO level were few and far between the large Indian companies. Hence, a separate category to award those women finance leaders who made it to the top was constituted. For the Woman CFO category, the consideration set was extended to the BW 1000 companies.
Since the MNCs and government entities (PSUs) have a different governance and operating environment compared to their private sector Indian counterparts, a separate category was created. While the financial analysis was done with FY15 audited financials, due weightage was accorded to the FY14 and FY13 numbers to ensure that consistency in financial performance was rewarded.
The Next Round
In phase-2 shortlisting was done on the basis of inputs from a primary survey conducted by global market research company Ipsos. It administered the primary survey to over 100 qualified chartered accountants, brokers and fund managers. External survey was administered for large size corporates, mid-size corporates, PSUs (large/mid-sized), MNCs (large/mid-size), M&A and Woman CFOs categories. CSR survey was administered by sustainability sector industry experts. The survey was administered “in person” over the month of January and February 2016 with an intent to capture the recency in perception of the company and its management amongst the market participants. CFOs serving a company for more than three years were considered for evaluation. However, for Woman CFO and triple bottom-line categories, the time period of having served on the position was kept at one year.
The findings of the two phases were shared with the esteemed jury, comprising Ashok Chawla, chairman of TERI, who also presided over as chairman of the jury. Other esteemed jury members included S. B. Mainak, managing director of LIC of India, Deepak Kapoor, chairman of PwC India, Naresh Takkar, MD of ICRA, Haigreve Khaitan, founder of Khaitan & Co, and Rajiv Luthra, founder of Luthra & Co. Since Mainak couldn’t personally join the jury deliberations, he shared his detailed feedback and scoring in an email. The jury met on February 22 in New Delhi and deliberated for over two hours. After a grueling session of deliberations, the chairman of the jury disclosed the names of the winners to the organising team. BW Businessworld and YES BANK abstained from voting but participated in the jury meet as non-voting members.
The jury commended the highly systematic and thorough process of evaluation undertaken in phase-1 and phase-2 surveys. The jury also observed that how in certain companies and categories the objective assessment and market feedback derived from the two phases were convergent, while in other cases the market feedback was quite contrasting to the pure financial performance. The jury felt that in recognising the contributions of a CFO and his team, the overall role of the company and its promoters, brands etc., could not be fully delineated as the CFOs performance, in several ways, is dependent on the same. It was interesting to note that the jury laid very high importance on the CFO (and therefore the company’s) focus on CSR and sustainability, beyond just the financial performance of the company.