Best CFO Awards 2015-16: Best Of The Best

Yes, it is that time of the year when YES BANK, India’s fifth largest private sector bank, and BW Businessworld join hands to recognise and acknowledge the exemplary achievements and the professional contributions made by the chief financial officer’s (CFOs) of India Inc.

The YES BANK-BW Businessworld Best CFO Awards 2015-16 will recognise country’s top financial officers, handpicked by a distinguished panel of jury after thorough scrutiny and a strict selection process.

Expanding on the role of the jury panel in finalising the winners, Ashok Chawla, chairman of The Energy & Resources Institute (Teri), and the chairman of the jury panel, says: “The role of a CFO keeps changing with changing environment and conditions. That essentially means that a CFO has to look at long- term sustained progress, value addition and wealth creation and that’s what the jury has tried to focus on.”

The jury members deliberated for over three hours and evaluated 30 finalist CFOs, from which 14 winners across 16 categories were handpicked including the two Overall Champion CFOs.

Commenting on the difficult choices the jury had to make while picking winners for each of the categories, Rajiv Luthra, founder and managing partner of law firm Luthra & Luthra says: “There was enough competition amongst the jury members and it is a very fair process; we deliberated and went into a detailed discussions. The jury had some highly enlightened specialists in this area.” This was duly seconded by another esteemed panel member — Haigreve Khaitan, senior partner, Khaitan & Co. He says: “In these challenging times where the world economy and Indian companies are in a challenging position, a CFO is truly put to test.” Khaitan says it is the ability of a CFO to manage business environment, finances and company strategy altogether. Deepak Kapoor, chairman of PwC India says that with the changing global economy the role of a CFO has changed over the years. “CFOs now have to evolve into what the need is.”

NareshTakkar, CEO of ICRA and another esteemed jury panel member termed the jury meet and the entire process as “objective”. “We not only focused on the quantitative criteria but also supplemented it with the survey process which made the process very comprehensive,” says Takkar.

Redefining CFOs
The key responsibility of a CFO is not limited to finance, accounting and the company’s investment activities. Today, CFOs are the nerve centre of any business operation. They are expected to perform in the core execution of corporate strategy — both organic and inorganic. The CFOs, over the years have increasingly become the chief flag bearer of corporate transparency, governance and corporate social responsibility (CSR) of the company they represent.

The YES BANK BW Businessworld Best CFO Awards for 2015-16 will recognise and reward 14 winners in a glittering ceremony that takes place in the capital.

Some of the key categories include Leading CFO-PSU, Leading CFO-MNC, Best Woman Leader CFO, Best CFO for ‘Creating Shared Value’, Best CFO for ‘Orchestrating the Best Inorganic Growth Strategy’ and Overall Champion CFO among others.

The Process
The consideration set comprised top 500 companies from BW 1000 list (2015 edition; total income + total assets ranked) and top 500 companies by market cap in the financial year 2015 (FY15). The financial performance in FY15 formed the basis of segregating companies. The list, however, did not include companies from the banking, financial services and insurance sector and those where CFOs belong to the promoter’s family.

The first phase (phase-1) of quantitative analysis involved shortlisting companies on the basis of consolidated financials for FY12-FY15. The list was segregated into large companies (net sales over Rs 3,000 crore) and mid-size companies (net sales under Rs 3,000 crore); public sector undertakings (large/ medium threshold modified to Rs 10,000 crore) and multinational companies (controlling stake held by a foreign company and not headquartered in India).

The analysis was performed on the basis of data (capital markets) provided by Capitaline Databases. The analysis of the company financials was done along three parameters: sustained value generation, leverage management and liquidity management. In order to factor in the sectoral nuances and differences and characteristics, a peer set comparison was made and the top performers from each sector were shortlisted for the next phase of evaluation. For mergers and acquisitions (M&A), companies from the base set that completed M&A’s in FY15, were considered. For the Woman CFO category, it was noticed that women leaders at the CFO level in large Indian companies were far and few between. Hence, a separate category to award women finance leaders who made it to the top was constituted. For the category, the consideration set was extended to the BW 1000 companies.

Since MNCs and government entities (PSUs) have a different governance and operating environment compared to their private sector Indian counterparts, a separate category was created. While the financial analysis was performed with the audited financials of FY15, due weightage was accorded to FY14 and FY13 numbers to ensure that consistency in financial performance was rewarded.

The second phase (phase-2) shortlisting was undertaken on the basis of inputs from primary survey conducted by Ipsos, a global market research company. Ipsos administered the primary survey to over 100 qualified chartered accountants, brokers and fund managers. External survey was administered to large-sized corporates, mid-sized corporates, PSUs (large/medium), MNCs (large/medium), M&A Category and Woman CFOs.

Plus, a CSR survey was administered by sustainability sector industry experts. The survey was administered “in person” over the month of January and February 2016 with an intent to capture the recency in perception of the company and its management amongst the market participants.

CFOs serving more than three years with a company and more than a year as CFO (as on April 2015) were considered for evaluation. However, for Woman CFO and Triple Bottom-line categories, the time period of having served on the position was kept at one year.

Jury Deliberations
The findings of the two phases were shared with the esteemed jury, comprising Teri’s Chawla, PwC India’s Kapoor, ICRA’s Takkar, Khaitan & Co’s Khaitan, Luthra & Luthra’s Luthra and S. B. Mainak, managing director of LIC of India. Since Mainak couldn’t personally join, he shared his detailed feedback and scoring over email. The jury met on 22 February in New Delhi and deliberated for long hours. After a gruelling session, the chairman of the jury disclosed the names of the winners to the organising team. BW Businessworld and YES BANK abstained from voting, but participated in the jury meet as non-voting members.

The jury commended the highly systematic and thorough process of evaluation undertaken in phase-1 and phase-2 surveys. It observed how in certain companies and categories the objective assessment and market feedback derived from the two phases were convergent in some cases, while in others the market feedback was quite contrasting to the pure financial performance. Jury also felt that in recognising the contribution of the CFO and his team, the overall role of the company, its promoters, brands, etc., could not be fully delineated as a CFO’s performance, in several ways, is dependent on the same. It was interesting to note that the jury laid very high importance on the CFOs’ (and therefore the company’s) focus on CSR and sustainability, beyond just the financial performance of the company.

Best CFO Awards 2015-16: Best Of The Best

@MonicaBehura @ashish_bw