Sharpening your vision: Nuggets of wisdom by Mr. Damodaran at the CFO NEXT100 Conference

At the CFONEXT100 Conference, Mr. Damodaran inspired finance leaders with insights on evolving CFO roles and embracing change.

In a powerful address at the CFO NEXT100 Conference, Mr. Damodaran captivated an audience of financial leaders with his blend of anecdotes, reflections, and profound insights. His words resonated not only as a tribute to the achievements of CFOs but as a call to action for the future. Here, we distill the key messages and lessons he imparted, each a nugget of wisdom for today’s finance professionals.

The Spirit of an outlaw: Sharpen your penknife

Mr. Damodaran set the tone of his address with a story from the classic “William” series by Richmal Crompton. He described William Brown’s moment of introspection: turning eleven and asking himself, “What have you done today that the world will remember you by?” Damodaran urged CFOs to adopt a similar mindset of continuous self-examination and improvement. He likened this pursuit to “sharpening your penknife” – a metaphor for refining skills, attributes, and reflexes to remain sharp in the ever-changing business landscape.

“Bluntness,” he warned, “signals the loss of drive.” Thus, he challenged his audience to find their equivalent of a penknife—something that would keep them motivated and sharp. What challenges, he asked, do you set for yourself to keep moving forward?

Trust: The cornerstone of leadership

In a landscape fraught with uncertainty, Mr. Damodaran emphasised that creating an atmosphere of trust is crucial. Trust, however, does not equate to blind faith. His philosophy of “trust but verify” underlined the importance of scrutiny in enabling a robust corporate environment.

Damodaran touched on a topic dear to many in finance: the role of the CFO as the company’s moral compass. He stated, “You are the co-pilot in the cockpit, guiding the company with a shared vision.” This notion places the CFO as more than just a numbers person; they are the voice of reason, often responsible for hand-holding directors in the boardroom and ensuring the integrity of the organisation. The CFO, he argued, must go beyond the arithmetic to focus on creating long-term value for the company.

Challenging the auditors: Embracing constructive tension

“Challenge the auditors,” Damodaran insisted, calling for a departure from the traditional deference often shown to external auditors. In his view, a CFO’s relationship with auditors should embody “constructive tension, not peaceful coexistence.” He advocated for CFOs to leverage auditors’ insights to improve practices rather than passively accept their assessments. “You’re paying them good fees,” he quipped, “so ask them what you can do better.”

Damodaran’s call to action was clear: the era of simply ticking boxes and achieving compliance is over. Today’s CFOs must be proactive, using technology and data to build transparency and trust both within their organisations and with external stakeholders.

The evolving role of the CFO: From arithmetic to strategy

Reflecting on the past, Mr. Damodaran narrated a conversation overheard in his youth: “The CEO takes care of the English, the CFO takes care of the arithmetic.” He noted how far the role has evolved since then, with CFOs now integral to strategy formation and organisational leadership. No longer mere stewards of financial health, CFOs have become strategic partners, guiding companies through complex decision-making and future planning.

He urged CFOs to consider their role as preparation for the next level of leadership, encouraging them to constantly sharpen their vision, embrace new challenges, and align themselves with the broader goals of their organisations.

Mentoring: The legacy you leave behind

In a memorable segment, Damodaran stressed the importance of mentorship, describing it as an often-overlooked responsibility of leadership. CFOs, he said, should actively work to nurture the “uncut diamonds” within their teams, helping to elevate their performance from present levels to their full potential. This act of mentorship, he contended, not only benefits the individuals being guided but also strengthens the entire organisation.

In a world where leadership often feels precarious, Damodaran highlighted the dangers of insecurity and self-preservation among senior executives. True leadership, he argued, involves passing on one’s knowledge and preparing the next generation to take up the mantle.

Technology and transparency: The twin pillars of trust

In his characteristically candid style, Mr. Damodaran touched upon the growing intersection of technology and finance. He stated that technology, combined with transparency, forms the bedrock upon which organisational trust is built. In an era of artificial intelligence, big data, and digital transformation, CFOs have the tools to facilitate better decision-making and strategic alignment.

However, he warned that technology alone is not the panacea. CFOs must also ensure that transparency remains at the core of their operations. The shift from a “numbers-first” approach to a holistic one demands that CFOs not only manage but also communicate effectively the strategies that drive value creation in their organisations.

Communication: The CFO’s essential skill

“Language was given to man to conceal his thoughts,” Damodaran joked, borrowing a phrase from the past. Yet, he pointed out that today’s CFOs must master the art of clear communication, especially when navigating complex financial landscapes. In a world of disclosures and compliance, he emphasised the need for direct, transparent communication to convey the right messages to stakeholders, analysts, and investors.

Communication, he argued, becomes crucial when navigating turbulent times, and it is the CFO who stands at the helm, providing clarity and confidence through well-informed, transparent discussions.

The road ahead: A call to courage and conviction

Mr. Damodaran concluded his address with a stirring reminder of the responsibilities resting on the shoulders of today’s CFOs. There are no shortcuts, he cautioned. The journey ahead demands a mix of commitment, competence, courage, and conviction. It requires CFOs to align themselves not just with financial outcomes but with the overarching mission of the company.

In his closing remarks, he commended the CFOs in the audience, recognising their vital role in steering their companies forward. He expressed hope that, with the right mindset and sharpened vision, they would continue to set benchmarks for future generations of finance leaders.