Describe about the Corporate Financial Management for Strategic Health Resource.
Introduction
For this research paper, I would like to select ‘Seafarms Group Limited’ as a research organization. Seafarms is listed as (ASX: SFG) on Australian Stock Exchange (ASX). Along with this, SFG is an Australian agri-food company that produces high-quality seafood. ‘Seafarms Group’ mainly operates as well as invests in sustainable aquaculture production platforms. At this time, Seafarms is the biggest producer of farmed prawns in Australia (SEAFARMS. 2016). In addition, Ian Norman Trahar and Andrew Grant are the chairman and the CEO (Chief Executive Officer) of the firm respectively. Moreover, Harley Ronald Whitcombe is the CFO (Chief Financial Officer) of ‘Seafarms Group.’
On the other hand, the chief financial officer of the organization plays a major role for the financial growth and success of the organization. The roles and responsibilities performed by the CFO of the firm play a primary role to accomplish the financial, strategic, and competitive goals of the organization in an effective and a significant manner. This research paper would be helpful to describe the major responsibilities of the CFO (Chief Financial Officer) of the firm. In addition, this paper would also be beneficial to depict that the responsibilities performed by the CFO have an effect on ultimate objective of the organization.
General Areas of Responsibility for the Chief Financial Officer
The chief financial officer of an organization is fully dedicated towards the financial growth of the business. The chief financial officer makes a lot of efforts to achieve the financial goals and objectives of the firm in a specified time period. Along with this, the CFO plays numerous important roles to improve the financial performance and to reduce the financial risks of the organization (Venter, 2007). In addition, the three major areas of responsibility for the chief financial officer of ‘Seafarms Group’ are described as below:
Organizational leadership is a major area of responsibility for the chief financial officer of the organizations. The CFO of ‘Seafarms Group’ is responsible to offer shared leadership as well as vision to the stakeholders & shareholders, and employees of the organization. Along with this, the CFO of the firm is responsible in order to an environment where employees and stakeholders of the firm become able to comprehend and share the vision of the business (Karaian, 2014). The CFO also plays a major role to provide support to all the members of the organization; so they can accomplish common performance objectives of the business in an effective and an appropriate manner. Moreover, the CFO of the firm is responsible to have effective leadership and interpersonal skills to deal with the stakeholders of the company.
In addition to this, the CFO of ‘Seafarms Group’ is responsible to maintain organizational accountability and transparency in an effective way. Moreover, the CFO of the firm creates and maintains sustainable value for the shareholders to maximize revenues of the organization. The chief financial officer of ‘Seafarms Group’ also develops effective partnerships with the members of the organization and also creates a common vision to improve the organizational performance of the business (Fitch, 2010). Along with this, the CFO works as an influential communicator and negotiator to accomplish the financial goals and objectives of the firm. In this way, it can be said that, the chief financial officer of the organization is responsible to works as an organizational leader in order to provide shared leadership and to accomplish the mission & vision of the business in an effective and a significant manner.
The chief financial officer of an organization works as a financial and accounting leader of the firm. This is also a major area of responsibility for the CFO of the organization. Under this area of responsibility, the chief financial officer develops numerous effective financial plans to improve the financial performance and to accomplish the financial goals of the firm in an effective and a proper manner. The financial plans developed by the CFO are beneficial to raise the funds of the organization (Abdelhak, Grostick and Hanken, 2014). On the other hand, the CFO of Seafarms Group plays a major role to control and manage all the financial activities of the firm. The CFO also checks and monitors the financial transactions to reduce the chances of error and to improve the transparency of the firm. In addition, the CFO of ‘Seafarms Group’ has a close eye on the cash flows of the business. It is essential to use the funds or capital of the firm at the right place and on the right time. The CFO is responsible to pay the taxes and dues to perform all the financial obligations of the firm in an effective and an appropriate manner (Batman, 2007).
Along with this, the chief financial officer of ‘Seafarms Group’ evaluates the financial requirements and also develops long-term financial plans to fulfill the financial necessities of the business in an appropriate way. Furthermore, under this area of responsibility, the CFO of the firm develops important accounting and financial functions for the financial growth of the business (Dlabay and Burrow, 2007). In addition, the accounting & financial functions are essential for the employees of the firm. It is because of with the help of these accounting & financial functions, the employees become able to under and perform financial obligations in an effective and an accurate manner. The CFO of ‘Seafarms Group’ also develops important accounting & financial methods, policies and actions to improve the transparency and performance of the business. The CFO is also responsible to provide accurate financial data and information to the employees; so they can perform all the accounting & financial functions in an accurate and a proper manner (Kyriazoglou, 2012). For that reason, it can be said that, the chief financial officer of the firm works as an accounting & financial leader to perform all the financial obligations and to fulfill the financial requirements of the business.
The chief financial officer is fully responsible to improve the overall organizational performance of the business. In other words, it also can be said that, performance management is also a major area of responsibility for the CFO of an organization (Lapovsky and McKeown-Moak, 2010). The CFO of the organization is responsible to ensure that all the financial plans & policies are complied with the financial goals and objectives of the business. Along with this, the CFO develops a performance management system to improve the financial performance and to meet the financial goals of the business in an effective manner. The CFO of ‘Seafarms Group’ develops financial strategies and actions plans to fulfill the financial necessities of the business. In addition to this, the CFO measures and evaluates the outcomes to monitor financial performance, develop corrective actions, and to minimize the impact of variances in an appropriate way (Fitch, 2007).
On the other hand, the CFO of ‘Seafarms Group’ is responsible to develop risk mitigation plans to reduce the financial risks of the business. Moreover, it should be noted down that, financial risks may occur at any time those influence the financial performance o f the firm in a negative way. In addition, to handle the situation of financial risk, the CFO develops risk mitigation strategies that play a major role to mitigate financial risks in an effective way. The CFO also plays a significant role to mitigate the risks that are related to the foreign exchanges, commodity price changes and contract failures (Bouchoux, 2009). In this way, it can be said that, the CFO of ‘Seafarms Group’ makes all the possible efforts in order to improve the financial and organizational performance of the firm.
Responsibilities Can Affect Ultimate Objective of the Organization
The responsibilities of the chief financial officer on an organization fully influence the ultimate objective of the business. For case, it should be noted down that, the CFO of the organization works as the leader to accomplish the financial and strategic goals & objectives of the business. The CFO is fully responsible for the financial growth of the organization. The CFO manages and controls the funds/ capital of the firm that is essential to fulfill the financial requirements of the business (Fabozzi, Drake and Polimeni, 2008). Along with this, the CFO also mitigates financial risks that generally takes place in the financial areas of the business. For that reason, the responsibilities performed by the CFO play a critical role to accomplish the goals and objectives of the business in a pre-determined time period. As a result, the responsibilities of the chief financial officer affect the ultimate objective of the business in a positive way.
Conclusion
On the basis of the above discussion, it can be said that, the chief financial officer of an organization plays an important role in the success and growth of the business. Along with this, it is also observed that, the CFO of the firm performs numerous responsibilities to accomplish the strategic, financial, and competitive goals & objectives of the business in an effective and a significant manner.
The effective market hypothesis is an investment theory that plays a major role to make important investment decision to gain higher returns at a lower level of risk. The effective market hypothesis states that security prices fully expose all the available financial information of the business firms. In addition to this, the EMH explains that business organizations or investors cannot hit the market because of the efficiency of stock markets. The effective market hypothesis describes that investors cannot buy undervalued stocks because of business firms always trade their stocks at their fair values/prices (Graham and Dodd, 2008). Along with this, EMH plays a major role in order to predict trends in the marketplace. Moreover, weak, semi-strong, and strong are the three major degrees of the effective market hypothesis those concentrate on the enclosure of non-public information in market prices.
On the other hand, the effective market hypothesis is essential to make investment decisions in an appropriate way. But, the pension fund manager might not pick a portfolio with a pin only on the basis of the accuracy of the efficient-market hypothesis (Tyson, 2016). In other words, it also can be said that, if the efficient-market hypothesis is accurate, the pension fund manager might not select a portfolio with a pin. There are numerous reasons behind this. For instance, the main cause is that the effective market hypothesis does not signify to choose a portfolio with a pin. Along with this, a portfolio with a pin will not able to offer higher returns to the investors. It is because of all the stocks of similar industries are not well-diversified and a portfolio with a pin may be risky for the investors. A portfolio with a pin will not be able to reduce the level of risk for the customers (Brealey, Myers, Allen and Mohanty, 2012). Hence, the portfolio decision that the pension fund manager make on the basis of the EMH will not work in the good deed of customers or investors.
On the other hand, the pension fund manager must be careful to select a portfolio to get higher returns. The fund manager should adopt and implement market policies to make decision related to the selection of portfolio. According to these market policies, the selected portfolio must be well-diversified. It is because of a well-diversified works in the favor of investors. A well-diversified plays a major role to provide higher returns to the investors. Moreover, the risk level of the selected portfolio must be suitable for the customers. It means that if an investor is willing to buy a portfolio on the determined risk level then the pension fund manager should pick that portfolio for the investor (Lee, Lee and Lee, 2009). In addition to this, in order to select a portfolio, the fund manager must evaluate that the selected portfolio is able to offer tax rebates to the customers or investors. In this way, it can be said that, manager should not rely on the accuracy of the EMH. The pension fund manger must follow all the market rules to select a portfolio with a pin.
References
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Batman, J.L. (2007). Advising the Small Business: Forms and Advice for the Legal Practitioner. USA: American Bar Association.
Bouchoux, D.E. (2009). Business Organizations for Paralegals, Fifth Edition. USA: Aspen Publishers.
Brealey, R.A., Myers, S.C., Allen, F. and Mohanty, P. (2012). Principles of Corporate Finance. NY: Tata McGraw-Hill Companies Inc.
Dlabay, L. and Burrow, J.L. (2007). Business Finance. USA: Cengage Learning.
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Kyriazoglou, J. (2012). Business Management Controls: A guide. USA: IT Governance Ltd.
Lapovsky, L. and McKeown-Moak, M.P. (2010). Roles and Responsibilities of the Chief Financial Officer: New Directions for Higher Education, Number 107. Australia: John Wiley & Sons.
Lee, A.C., Lee, J.C. and Lee, C.F. (2009). Financial Analysis, Planning & Forecasting: Theory and Application. USA: World Scientific.
SEAFARMS. (2016). Home. Available At: https://seafarmsgroup.com.au/ [Accessed On: 21st Sept. 2016]
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