subpage banner


Keynote Speech By Mrs Josephine Teo, Minister of State For Finance And Transport At The CFO Connect Symposium

15 Nov 2012

Mr Michael Lim, Chairman of the Pro-Tem Singapore Accountancy Council,

Mr Olivier Lim, Chairman of the Singapore CFO Institute,

Distinguished guests,

Ladies and gentlemen:

1. Good morning, and welcome to the CFO Connect Symposium.

2. The Singapore CFO Institute is organising this Symposium for the first time.  The fact that so many practitioners are here today suggests that you too see the need for CFOs to share insights and perspectives.

Key Challenges Faced by Companies and Role of CFOs

3. In the aftermath of the financial crisis, many economies have been reviewing and changing their corporate and financial regulations.  In Singapore, we recently completed its review of its Code of Corporate Governance and Companies Act.  The changes will reinforce investor confidence in the market. 

4. However, the landscape for cross-border regulations is less certain with many forces at work.  As CFOs, many of you are keeping a close watch and need to develop a sense of what matters and what doesn’t.   You will need to advise your CEOs and board of directors on the implications, and make drawer plans along the way. 
5. Back on the home front, Singapore is entering a phase-change in our economic development.  Our economy is well developed and diverse.  But it has also relied on workforce growth to keep growing.  We know that this is not sustainable.  We accept the need to change, to shift to a model where productivity and innovation are the key drivers of growth.  So, we decide that our policies must also shift gears.

6. Having won the intellectual argument, the real battle begins.  This is when businesses are confronted by hard questions – there is growth opportunity but existing operations dictate that 100 more workers are needed.  Where to find them?  If we manage to hire more, can we expect manpower costs to stay the same?  Shall we focus instead on building new capabilities?  What? How? How much?  Or shall we seek support among industry peers and get the Government to re-think its policies? Can we at least bargain for more time?

7. These daily conversations (or battles, if you prefer) are part and parcel of our economic transition and every bit as important as the national conversation that is taking place at the same time.  I should add that the battle is not between the Government and businesses.  We’re in this together.  The battle is really between the short-term and the long-term, the desire to avoid (or lessen) pain and also the knowledge that inaction today could mean problem escalation tomorrow.

8. Policy shifts pose very real challenges to businesses.  But they cannot be avoided if our push to become an economy driven by skills and innovation go beyond good intentions and slogans.  Transformation at the macro level comes about because of changes at the industry and enterprise level.  We become a more productive economy when industries are and individual businesses are more productive.  Therefore, our policy of tightening manpower growth is accompanied by generous support for productivity and innovation by businesses and industries.

9. This is where I see CFOs playing a critical role, by understanding trends and challenges in the broader environment your businesses operate in, by encouraging strategic ways of dealing with these challenges, and by working out realistic roadmaps for uplifting your businesses.

10. As CFOs, you understand more than anyone that becoming more productive is not just about the bottom-line.  It is also about growing the top-line.  CFOs are well placed to give honest, unembellished assessments to your colleagues.  Your advantage is in taking a hard-nosed look at the story that the numbers are telling you.  This, coupled with the ground insights of the people running sales and operations, enable the whole business to examine the cost drivers and revenue opportunities. 

11. At the same time that you point out problems, you are very much a part of the solution.  You can help steer thinking about the business model and its sustainability.  If the company needs to invest to build new capabilities, you need to help design the plan of action.  You can also advise the company how best to take advantage of government support. 

Survey suggests CFOs are ready for more strategic role

12. The CFOs strategic role was brought out in a survey commissioned by the Singapore CFO Institute in partnership with the Singapore Exchange, and carried out by a Singapore Management University team.  The survey examined what a modern CFO does; how much that has changed over the years; and what aids and impedes the effectiveness of the CFO function.

13. As expected, CFOs cited the traditional functions of financial and management reporting as their key responsibilities. However, many also identified non-traditional roles such as ‘mergers and acquisitions (76%)’, ‘strategic planning (68%)’ and ‘enterprise risk management (67%)’. More than 95% of the respondents also agreed that their roles had expanded to become business partners of the CEOs.

14. Two other findings that caught my attention.

Should CFOs be Chief Risk Officers?

15. The survey had asked respondents to rate how the importance of their functions have changed over the last three to five years.  Most respondents believed that enterprise risk management has emerged as a top priority. This probably reflects the level of uncertainty felt by businesses today.  One implication is that instead of saying no to proposals that carry high risks, CFOs are being challenged to find solutions that better balance risks with rewards.

16. The increasing importance of enterprise risk management invites the question of whether the CFO should be the de facto Chief Risk Officer. Are CFOs in the best position to oversee the management of enterprise risks, or should they be overseen independently of the CFO Office? I understand that today’s Symposium has arranged for a special panel debate on this.

Are CFOs Spending Enough Time on Talent Management?
17. In response to the question on key challenges faced by the finance function in their organisations, more than half of the CFOs said that the ability to attract and retain talent was a critical factor inhibiting their effectiveness. This observation in itself may not seem new, as competition for talent is an on-going challenge even for successful organisations. But there appears to be a mis-alignment between perception and action because of the finding that only 12% of CFOs considered talent management a key responsibility.   

18. This could be because the organization has a Chief HR Officer, in which case, the CFO should rightly focus on other areas.  Some studies suggest however, that the best performing organisation have joint leadership accountability on talent matters. According to a report released last month by the American Institute of CPAs (AICPA) and Chartered Institute of Management Accountants (CIMA), 43% of the C-suites executives said that poor talent m anagement has capped their companies’ growth.  The report called for business leaders and organisations to embed human capital strategy within the wider overall business strategy.

19. CFOs are in a good position to help their HR leaders to develop talent management metrics. This is because they have the business acumen to help tie talent management to business goals. For example, they can rely on their analytical and strategic capability to advice on the strength of succession planning in the organisation. This is another area worth further discussion. 


20. The survey provides a useful snapshot of CFOs in Singapore.  It is a good starting point to reflect on challenges and opportunities faced by the CFO community here.  I hope today’s discussion adds further insights that would help the Singapore CFO Institute refine its plans and programmes for CFOs.

21. More importantly, I hope you will consider my earlier suggestion to play an active part in helping your businesses succeed alongside the transition of the Singapore economy.  It is a transition that will strengthen business and industries. In doing so, we can strengthen Singapore’s chances for continued growth and success, and to keep it a great place for business for all of us.

22. I wish you a fruitful day ahead. Thank you.