| Q. |
What do you find most challenging about dealing with the board? |
| A. |
Centennials board is drawn from individuals with diverse technical backgrounds and significant business experience over a number of different industries. Therefore, ensuring that I respond to questions over varying topics in an informative and concise fashion is always a challenge. Centennials board always has a full agenda as the company continues to grow through new projects and merger and acquisitions activity, so progressing through financial matters in an efficient and informative manner is important.
New technology is also a challenge. How will it integrate to our current infrastructure and how will we educate the support staff on it? Who maintains it post implementation? |
| Q. |
Should the CFO be on the board? |
| A. |
This is a difficult question to answer. It depends very much on the circumstances. In the UK the accepted model is for the CFO to participate on the board as a finance director. In Australia, practise has been more towards the CFO not being a board member and thus providing clear boundaries between the corporate governance role of the board and the management of the financial function by the CFO. Again, it really depends on the circumstances. In the case of a small cap listed public company it may well be appropriate for the CFO to be on the board as a finance director. |
| Q. |
What are the critical factors which underpin the relationship between the CFO and the board? |
| A. |
The CFO needs to be a person that has high standards and brings a degree of rigour to the finance function. The board needs to be comfortable with the integrity of the CFO and that the individual is transparent and honest in the way they present financial issues that affect the business. The working relationship between the chairman of the audit and risk committee and the CFO is particularly important. |
| Q. |
Research suggests more boards expect CFOs to be partners in the strategic direction of the organisation rather than just stewards of resources, has this been your experience? |
| A. |
Yes, it has been my experience. For a number of years now I have been involved in the strategy sessions with other members of the executive team. In relation to Centennial specifically, we have a senior executive who manages this area, but in relation to long term corporate strategy and merger and acquisition activity, myself and the executive team are all heavily involved. |
| Q. |
Have you seen any change in the priorities or focus of the board which impact the CFO in recent years? |
| A. |
Ive seen a significant change in priorities for boards in recent years, particularly given a number of high profile corporate failures, some of which, in the mining sector, were associated with inappropriate use of financial instruments (over hedging). There is significantly more emphasis placed today on risk management and corporate governance policies and procedures.
The ASX Corporate Governance Councils Principles of Good Corporate Governance and Best Practice Recommendations (published in March 2003) and recent corporate law reform which mandates a sign off by the CEO / CFO as a precursor to the board approving the financial statements, are examples of recent changes. |
| Q. |
Do you have any particular approaches you use to assist the board in their role? |
| A. |
In assisting the board I attempt at all times to present financial information in a way which is clear and concise. I also endeavour to ensure that they are aware of not only current financial issues but, in a forward looking manner, potential future issues that need to be addressed. As a company, we have four audit and risk committee meetings a year to ensure not only the financial reporting process is well planned and executed, but also to ensure that adequate time is given to the companys business risk profile (June and December meetings). |
