CFO Studio Magazine with Bernd-Peter Bier, CFO, Bayer

4th QUARTER 2015 WWW.CFOSTUDIO.COM 23 Global Expectations SETTINGUP ANDGROWING AMULTINATIONAL BUSINESS HAS ITS CHALLENGES EXECUTIVE DINNER SERIES EVENTS “A lot of global companies with cash on the balance sheet have to make strategic decisions about where they deploy that cash. If you are new to an overseas market, compliance can be killer. IT is also an issue.” “It’s important to focus on long-term interest rates and market stability and the question, ‘Will our current product be relevant in 10 years?’” “Managing costs for health care and benefits and staying competitive is incredibly complex. You have to look at the complete picture of employee- related costs. Global companies are [giving up] defined-benefit programs — each country’s circumstances are unique.” “The offshoring trend is ongoing, although it is a challenging one that must be considered carefully.” T he CFO StudioWorld-Class Companies Executive Dinner Series met in June at Roots Steakhouse in Morristown, NJ, for a discussion of “Challenges and Opportunities for the Global Company CFO: What’s Next?” led by Richard Veldran, CFO of Dun & Bradstreet, who manages a global finance team of 490. In an interview, he named a number of challenges and opportunities that apply to his company’s global model. Dun & Bradstreet’s commercial database, the world’s largest, includes 240 million companies. “In any given country I need to have the best data, and therefore, a leading presence in every country,” Mr. Veldran explained. The prize for breaking into an emerging market is enormous, but the risk is real, so Dun & Bradstreet’s strategy varies. Where it makes sense, D&B owns and operates facilities in emerging markets; in other scenarios it has created partnership models. “Take China and India; there’s lots of potential for growth, but it’s helpful to have a local player to help us navigate the effort,” he said. In these cases, D&B has created a majority-owned joint-partnership structure. In markets with slower domestic growth, the relationship formed will be strictly a partnership. “With a partnership, we have access to data globally, including markets where we don’t own a business.” The challenges of gaining a global footprint include currency exchange risks. “The strength of the dollar has made it difficult to drive growth and profit outside the U.S.,” said Mr. Veldran. Enterprise risk management has also taken on added importance. “You must understand the primary risks at a detailed level, on a global scale, and monitor those risks,” he said. “A culture of transparency and compliance will be a benefit. If you see something unusual, say something. ... [Otherwise] it could bring a company down.” C Richard Veldran Chief Financial Officer, Dun & Bradstreet Discussion Leader “Being a champion of total shareholder return is my primary mandate, and it’s becoming more difficult to accomplish as regulations change quickly. We’re managing a global company for growth, and we need to manage risk while investing for the long term.” Claude Draillard CFO, Dassault Falcon Jet Bill Flynn CFO Sharp Electronics Corp. Thack Brown GM, Global Head Line-of-Business Finance, SAP Burkhard Zoller CFO, Evonik Corporation   “A challenge for CFOs is setting up productive partnerships. How you act depends on the stage of the business. Is it an emerging market? That’s one challenge. Tax codes are also a major challenge.”  “You have to know the opportunities and risks in several different markets, time it right, and partner with people who can act as ambassadors. The CFO should be involved in decisions to enter new markets to help determine what kind of profit can be made on the deal.” “Fluctuations in the world economy are a major challenge for CFOs at global companies. There are many uncertainties with exchange rates, and the challenge is determining where those rates will be favorable for the longer term.” Robert Costantini CFO ORBCOMM Michael Bickel CFO Schindler Elevator Corporation Lalit Ahluwalia CFO, Ferring Pharmaceuticals PROMOTIONAL PARTNER PROMOTIONAL PARTNER