More than twenty CFOs joined the inaugural Jarden and McKinsey & Company New Zealand CFO Forum in Auckland on September 19, 2024, to discuss financial leadership in the current economic environment.
In a day filled with robust discussion, five key points emerged:
1. The CFO as the internal activist.
The rise of activist investors has become a significant trend in recent years both globally and in New Zealand. These investors are increasingly targeting companies across various sectors, pushing for changes that they believe will enhance shareholder value.
The forum highlighted how CFOs are increasingly taking on the role of the ‘internal activist’, challenging their companies on value creation from an outsider's perspective and being deliberate about pre-emptively addressing issues that attract external activist attention.
2. Geopolitical changes present opportunities amid the risk.
Given ongoing global geopolitical volatility, the forum discussed key tactics for incorporating geopolitical risk assessments into strategic planning. These include scenario planning, diversifying supply chains, and forming cross-functional risk management teams to anticipate and mitigate disruptions, ensuring operational stability.
Additionally, diversifying capital sources, such as looking to Australia, building relationships with international investors, and exploring private equity, are crucial. By adopting these strategies, CFOs can better manage geopolitical risks and promote sustainable growth.
3. Resurgence of M&A activity.
While the past two years have been challenging in M&A, the forum discussed the potential for a resurgence in deal activity. The discussion covered how organisations can achieve full value from transactions by highlighting the importance of strategic consistency and thorough integration planning. Effective communication with stakeholders and alignment with long-term strategies are crucial for capitalising on opportunities, ensuring each transaction aligns seamlessly with broader business goals.
4. Strengthening CFO-Board relationships.
As the dynamics between CFOs and corporate boards evolve, the forum highlighted the increasing importance of trust, transparency, and open communication. These factors are essential for effective strategic decision-making and value creation, building a solid foundation for corporate governance.
The panelists shared their views on the ever-evolving breadth of the CFO role, covering rigorous capital allocation, objective data and insight provision, shareholder and investor communications, strategic challenge, and internal activism.
5. Effective communication with institutional investors.
Transparent communication and prioritisation of ESG remain key to building investor confidence and ensuring sustainable growth.
The forum provided valuable insights on how to attract external investors more effectively, emphasizing the importance of clearly and convincingly communicating long-term strategies to build strong investor confidence. Key topics explored included incorporating climate risk, actively engaging with investor management teams, addressing the challenges of small-cap investments, transparently communicating core values and metrics, and prioritizing ESG principles.
The forum highlighted the pivotal role of CFOs in shaping future financial strategies, and reinforced the importance of global cooperation and strategic leadership.
We extend our gratitude to all speakers and to Jarden New Zealand for their partnership in producing this unique event.