As COVID-19 re-shapes our daily life, this global phenomenon and its fallout has left business leaders facing unprecedented challenges, many of them changing by the day. FDs and CFOs have a central role to play during the financial crisis since they are the leaders who most directly contribute to a company’s financial health and organisational resilience day to day.
Amid all of this uncertainty, having the right CFO in place has never been so important.
Cash is always king
Many organisations have needed to accelerate their actions to protect employees, customers, suppliers, and financial results. The challenges are many and varied: with some companies losing up to 75 percent of their revenues in a single quarter, cash isn’t just king—it’s now critical for survival. While always important, digital connectivity is now fundamental to the continuity of business operations, as remote work becomes the norm across much of the globe. The need for frequent, transparent communication with colleagues and investors has only ramped up in importance as business conditions, epidemiological forecasts, and rules of conduct change daily, if not hourly.
Amidst the chaos one fact emerges with the utmost certainty – the role of CFOs in almost every company is of critical importance right now. COVID-19’s biggest crisis is that of asset liquidity and the financial stress that results from it. The CFO can play a strong, central role, alongside executive peers, in stabilizing the business and positioning it to thrive when conditions improve.
The immediate priority for the Finance Director or CFO will be to address the potential financial impact on the organisation. If business dries up or orders cannot be fulfilled, what is the anticipated impact on the cash position? Cash is always king and if liquidity is under pressure, how can this be remedied quickly?
Can the debtor book be called in, creditor payments delayed, or short-term borrowing secured? The best option will depend on the type of business and the impact of the contagion on the cash position of customers and suppliers.
Protect your people
The news has been dominated by concerns over the security of jobs and workers’ ability to pay their bills. Statutory sick pay didn’t quite cut it and the Government has now stepped in with additional measures that will help individuals feed their families and organisations retain staff. How this will work in practice is still evolving and CFOs will ensure clear communication across the organisation to ensure everyone understands. Political solutions on the surface may seem simple, but behind the headlines, the devil is always in the detail.
Fear is one of the worst contagions of them all and in this time of uncertainty, the Finance Director or CFO will need to do his or her best to provide stability. During the last financial crisis in 2008, what was evident during this time was the knee-jerk response of organisations in cutting staff. When the market eventually came back, they were left chasing people they’d previously let go. The businesses that got back on their feet the quickest were the ones that had worked hard to keep their people.
Recruiting the right CFO in the wake of the pandemic could make the difference between your company’s survival or not during these challenging times. It will also ensure that you have the right commercial and strategic financial leadership to help reduce some of the immediate fear and uncertainty, prepare your business for short term stabilisation in anticipation of the next normal and plan for longer term preparations for your company to make bold moves during the recovery phase.
Norrie Johnston Recruitment are specialists in global executive search and interim management. When you commence a search for an interim or permanent Finance Director or Chief Financial Officer with NJR, you will have the benefit of working with some of the most experienced and successful executive level finance recruiters in the UK, who also have real world corporate experience in helping our clients through a financial crisis. To learn more about our FD and CFO practice, or to discuss hiring an interim FD or CFO please contact: Rex Cridland, MD at Norrie Johnston Recruitment on 07714 252116 or email: firstname.lastname@example.org