The role of the CFO in corporate governance
An address by ASIC Deputy Chair Jillian Segal, at the Financial Executives International Luncheon, 3 May 2002.
Thank you for inviting me to join you today. It is a pleasure to be here.
The role of the CFO is probably a pretty interesting one in most companies at the moment. Traditionally, the primary function of the CFO was that of 'finance' wherein the CFO's responsibility was to ensure that the company stayed financially healthy and could meet its obligations at any time – the CFO was in other words the 'guardian of the books'. While this responsibility remains an important one today, the evolution of the CFO's role has embraced a wider and more common range of responsibilities such that today's CFO has to be sensitive to many factors other than the financials of an organisation. Issues such as corporate governance, risk management and the maintenance of effective systems of internal control have emerged as essential. Globalisation and the acceptance of globally harmonized reporting standards in the future are bound to have other consequences for the CFO in years to come.
Before I talk about some of the more general aspects of corporate governance and ASIC's thoughts in relation to governance, I would like to spend a few minutes on the duties of the CFO, as an officer of a corporation, under the Corporations Act (the Act). While I am sure you are all aware of these duties, recent events suggest the need to refresh some memories.