The art of managing a company's money

A good chief financial officer (CFO) must treat his company's assets as even more precious than his own money, Veeravat Kanchanadul, CFO of the leading conglomerate CP Group, said.

"For the company and its shareholders to feel comfortable, a CFO must view assets of the company as more important than his own, taking care of them more carefully that he takes care of himself," he said.

A CFO must always remind himself that he is managing money, which belongs to the company, its suppliers or banks. He should never foster an attitude that losing that money is alright just because it did not come from his own pocket, Veeravat said.

The main duty of a CFO is to seek funding and allocate resources in ways that generate maximum benefits for the company. And because nowadays companies rely for their finances on external sources, such as the stock market, bondholders and banks, CFO should possess and project a reliable and predictable personality.

"Don't have a lot of surprises in store. A CFO can dream but should be logical in doing even that," CP's finance chief said.

Naris Cheyklin, senior executive vice president of Central Pattana, said a CFO must act as a model of discipline for the company.

"By nature, chief executives tend to focus on creating results, expanding businesses, developing new products, increasing market share and so on. But a CFO must dare to warn that we're on the brink of falling off the cliff, this is not the way to go. We could fall off the cliff," he said.

A CFO has to set the financial ratios that a company can withstand while meeting its growth targets.

But that does not mean that a company should be completely risk averse.

A fine balance between risk and growth must be found because if there is no risk, there is no reward, Naris said.

A good CFO should also be well connected with his network of friends and associates so that he is constantly updated on what is going on inside and outside the company, he said.

Sharing Veeravat's view that a CFO must treat other people's money as more important than his own, Naris said he was under tremendous stress each time his company invested in a new, big project.

"In particular, the Central World, which is the largest project the Central Group has ever invested in. I was walking in and checking it every day [after its launch]," he said.

Former finance minister and banker, Thanong Bidaya, said that among the most important things that a CFO must look at is the company's supply chain so that he can find ways to create more value for the organisation.

Montree Sonpaisarn, chief executive of leading brokerage company Kim Eng Securities (Thailand), said that the engine behind the success of many organisations is a "duo" of the chief executive and CFO who work in perfect harmony.

"Usually, there is one person in the equation who is creative and is constantly dreaming of new possibilities. But in the end, every one of them will have a partner who keeps the finances in top shape," he said.

Montree cited examples of such duos in Thai organisations, such as Anant Asavabhokhin and Adisorn Thananun-narapool at Land and Houses; Prasert Bunsumpun and Pichai Chunhavajira at PTT; and Kobchai Chirathivat and Naris at Central Pattana.

The executives were speaking at a seminar entitled "Professional CFO… the path to survival or prosperity of the organisation", organised recently by the NIDA Business School, the Stock Exchange of Thailand and the Market for Alternative Investment.