CFO Studio Magazine - CFO Innovation Award Winners

2nd QUARTER 2015 WWW.CFOSTUDIO.COM 21 Find more peer-to-peer insights and interviews on our website www.cfostudio.com ? Thoughts from the CFO and GC “Y ou know a CFO and GC are working productively when it becomes a habit to pick up the phone (in either direction) to give a ‘heads-up’ or to ask if you can bounce something off the other person,” says Sandra Clarke, CFO of Daiichi Sankyo. “The relationship is in trouble when one side starts avoiding the other because the other team is ‘difficult’ or when your subordinates consistently criticize the other — for example legal colleagues feel finance doesn’t understand the risk, or if finance employees believe legal takes too long to review and is too picky.” Evolving Relationship During more than a decade as a GC, Craig Bleifer has seen some positive changes in legal-financial relationships across the board. “The two departments have become a lot closer,” he says. “The marketplace, the flood of regulations, and other issues have eroded many barriers. A CFO and GC work much more closely today, and that’s a good thing.” What’s Ahead “I think our most challenging times [will come] as we navigate our patent cliff during the next year or two [when many blockbuster drug patents will start to expire],” Clarke says. “The GC will definitely be involved because we need to address everything from new market strategies, acquiring and licensing new companies or products to supplement our portfolio, and managing current operations. You can’t do everything, so we need to agree on the most critical tasks from both a record-to-report perspective and a legal liability perspective.” team,” he explains. “We’re most effective when we have a full understanding of the business needs and objectives of the company, and we enjoy a close and trusting relationship with finance and other departments.” Shared Interests The company produces blood pressure treatments Benicar, Azor, and Tribenzor; an anti-platelet medication called Effient (co-developed and co-marketed with Eli Lilly and Co.); and also co-markets Zelboraf, indicated to treat metastatic melanoma. The organization also recently launched a novel oral anticoagulant called Savaysa. At Daiichi Sankyo, finance and legal work together closely on acquisitions, compliance, and key reporting requirements. “When it comes to issues like compliance, the ‘buck stops’ with finance because it’s my signature on the annual audit’s management letter and my accountability for the financial portrayal of the company,” says Clarke. “But the GC needs to make sure that the CFO has a full understanding of the legal issues so they can jointly assess the financial risk. The CFO also needs to make sure the GC is aware of any control violations in order to identify any legal exposure.” Daiichi Sankyo’s reporting structure supports that kind of cooperation, she adds. “Craig and I both sit on the executive leadership team,” Clarke observes. “Thus we work together frequently on business strategy. For example, the whole team is focused on how we [will] support the successful launch of our latest product. Finance and legal both have roles to play in a launch.” Further, while a CFO typically drives the assessment, monitoring, and compliance with new regulations in financial reporting, tax, and other areas, the working relationship between Clarke and Bleifer doesn’t get carved up into narrow silos. “Here at Daiichi Sankyo, Inc., I interface with the GC’s team regularly in a multitude of areas, routinely sharing information and input,” Clarke relates. “Whenever a new area arises, we discuss the legal risks and the legal requirements. Then we look at the financial implications and try to figure out the best approach to implement or comply as needed.” Established in the United States in 2006 — by the merger of two 100-year-old Japanese pharmaceutical companies —Daiichi Sankyo’s U.S. commercial operations are based in Parsippany, NJ, and its research and development is headquartered in Edison. As CFO of the American wing of the Japan-based company, Clarke’s responsibilities include international reporting matters, like J-SOX ( Japan’s Financial Instruments and Exchange Act). “I am responsible for reviewing our financial results and certifying to our Japanese parent that Daiichi Sankyo, Inc.’s financial results are accurately reported in full compliance with all accounting rules and regulations,” Clarke says. “In addition, I participate in the Financial Oversight Committee along with our Head of Compliance “FINANCE AND LEGAL BOTH HAVE ROLES TO PLAY IN A PRODUCT LAUNCH.”