Home' Charter : 0811 Charter Aug Contents 18 Charter I August 2011
Business > CFOs and ethics
raising the red flag
A recent round table saw three industry trailblazers discuss the ethical
dilemmas that can face CFOs and the pressures of raising the red flag.
Story Natalie Apostolou
The contemporary CFO needs to be a
trusted confidante, a gatekeeper to
the board and an insurer of information
with the skills of a forensic investigator.
Being media savvy and keeping the
company honest doesn’t hurt either. The
complexities of the modern business
landscape where social media has warped
the idea of continuous disclosure and
board members have short memories has
meant that the CFO is left juggling a multi-
faceted role within the business.
Knowing when and how to raise a red flag
within the organisation is a delicate task but
can also be a mark of CFO excellence.
The Institute of Chartered Accountants,
led by head of standards and quality
Chris Westworth FCA, gathered industry
trailblazers Peter Day FCA director, Ansell
Limited, Catherine Mulcare CA, CFO and
COO Melbourne Storm Rugby League Club
and Peter Meehan FCA executive director,
Group of 100 to discuss the politics of red
Chris Westworth: The CFO is a multi-
faceted role that reaches out through the
entire organisation. You need to be very
close to your colleagues, your CEO and
board and you really need to understand
Peter Meehan: The buck stops with the
CFO. It’s your professional reputation and it’s
how you live with yourself.
An important part of being a good CFO is
that when something is wrong, you need to
know about it. If you think something is wrong,
then you are probably right. If it smells a little
bit at the surface then it probably smells a
whole lot down below. You really have to dig
in and make sure you are there. While you are
involved in the running of the business and
making sure everything is coming together, you
are also the custodian, the gatekeeper. You are
the one to make sure that nothing gets past
and causes grief to the stakeholders.
Being a CFO is not a popularity contest.
It is nice to get on with everybody but at
the end of the day it’s good to know that
if something comes up and it needs to be
fixed, you’ll fix it and you’ll fix it properly.
It is your example that you have set to the
entire organisation about how you manage
something, particularly if you raise the red
flag. How it is administered and how that
issue is dealt with is a signal to the company
that there are ethics behind it.
It is no different if you work for a listed
company or a private one. When you have
a red flag you must consider how important
is it, who needs to know and is it an internal
thing you can fix or is it something that the
owner or the board needs to know?
The difficulty about that is to figure out
where that red flag sits in the priority list. So
firstly make sure you are right, do all your
research and go through it. Involve the right
people, the CEO and your external auditors.
Make sure you disclose it as quickly as
possible so you make sure it’s out in the
open and then fix it fast.
CW: In our careers we sometimes think ‘this
is too hard’ or taking on a CFO role we may
not think that we are up for the job. What
were your first perceptions of arriving in
Catherine Mulcare: A wise person I
spoke to before taking on the role [CFO/
COO Melbourne Strom] said do your due
Not just on the company but yourself,
about your skill set and your own resources.
What do you have available to you in order
for you to do this job and do it well. Also do
the due diligence around understanding what
the organisation is offering you in terms of
support and your ability to do that job.
I was a little spoilt because I am at a
smallish sport organisation, but it’s part of
News Ltd, so the resources and support
available to me are just as good as those
that were available to me at KPMG. Whether
you are looking at moving into a CFO role
or moving into your next CFO role, that due
diligence is the best advice I got.
Peter Day: Every CFO role is different.
You could be a CFO that’s in business
development or the CFO who is the classic
finance person or the CFO that’s charged
with M&A. It is not a one-size-fits-all. You can
genuinely ask does my skill set fit into what
that organisation is looking for? That doesn’t
mean that you can’t grow into other things.
CFO has three letters in it, but there is a
multitude of things that can go underneath it.
PM: The traditional role of the CFO these
From left to right: Peter Day FCA director Ansell Limited, Catherine Mulcare CA CFO
and COO Melbourne Storm Rugby League Club and Peter Meehan FCA executive
director Group of 100.
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