Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwi companies keep closer eye on their CFO’s

Kiwi companies keep closer eye on their CFO’s

KPMG International survey

New Zealand companies are leading the world when it comes to monitoring the performance of their Chief Financial Officer (CFO), according to KPMG International’s 2014 Global Audit Committee Survey.

The survey, which explores the challenges being faced by audit committees in organisations in 17 countries around the world, also gives specific insights for New Zealand.

Seventy-three percent (73%) of New Zealand companies reported that the performance of their CFO was “rigorously evaluated against clear performance objectives”. This was well above the global average of 59%.

Souella Cumming, the head of KPMG’s Audit Committee Institute (ACI), says it is encouraging to see New Zealand companies are increasingly valuing the CFO role.

“The CFO is becoming as critical to an organisation’s performance as the CEO,” says Souella Cumming.

“In many of the companies we work with at KPMG, we’re seeing a definite re-positioning of the CFO role. They are evolving into much more of a strategic business partner within the organisation.”

When it comes to succession planning for the CFO, however, New Zealand was doing just as poorly as the rest of the world. The survey revealed that 62% of global companies do not have a formal succession plan in place for the CFO – and warned this was a “major risk” for any company.

Bigger workload, wider responsibility

The 2014 Survey also found that the workload of audit committees continues to grow bigger and wider. It was expanding beyond the core responsibility of financial risks into other areas such as IT, cyber-security, and global systemic risks. Forty-three percent (43%) of respondents said it was becoming “increasingly difficult” to oversee these wider responsibilities.

Graeme Edwards, Head of Audit at KPMG New Zealand, says management and Boards should be careful not to overload their audit committee members.

“Audit committee agendas are not getting any lighter,” says Graeme Edwards.

“These survey findings should serve as a catalyst for boards and management teams to assess the adequacy of their governance processes in critical areas. It’s a good time to step back and assess whether the audit committee’s risk oversight responsibilities are appropriate.”

Strategies to better manage the workload might include reallocating responsibilities among the full Board and board committees; or creating new committees to focus on specific areas of risk.

Government regulation biggest challenge

The 2014 Survey also asked respondents which risks, aside from financial reporting risk, pose the greatest challenges to their company. Government regulation/impact of public policy initiatives was ranked as the biggest challenge, at 48% globally (and 53% among New Zealand companies).

Souella Cumming says this is not surprising, given the increasing pressures of public policy around issues such as health and safety.

“Health and safety is currently top of mind, particularly in the wake of the Pike River disaster. The Government has signalled changes to legislation that will place more onerous responsibilities on directors, with significant consequences for non-compliance.”

Growing role for internal audit

In other Survey findings, more than 80% of Audit Committee members wanted to see their company’s internal audit team take on broader responsibilities. They wanted to extend internal audit’s role beyond the traditional financial reporting and controls, to encompass other key risks facing the business.

Souella Cumming says Australasian companies are well-placed to take this ‘enterprise-wide’ approach to risk management, as they are already ahead of the game.

“While it’s still a fairly recent development in the USA, New Zealand and Australia started to adopt enterprise risk management back in the early 90s. We were the first countries in the world to develop a risk management standard…it only became an international ISO standard 4-5 years ago. We did lead the world in that context.”

Another trend in recent years is for companies to outsource (or co-source) their internal audit function. KPMG New Zealand currently partners with a number of organisations, both public and private, to provide these services.

Ends


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news