The CFO 411: Narrative in the Numbers

Collection of numbers

A decline in industrial production. Slipping corporate profits. A tumbling stock market. Is a national recession inevitable? Or could the buoyant job market mean the United States will be relatively unmarred by the looming global slowdown? Finance leaders and economists alike have been scrutinizing the latest financial indicators, trying to shape the flood of data into a coherent narrative about where the economy is headed—and what that direction could mean for companies looking to stay competitive.

4 need-to-know headlines

1. Recession anxieties rise

When oil prices and the stock market dipped early in the week, C-suite anxiety rose about the possibility of growing economic malaise. And China’s continued slowdown has intensified concern that the U.S. may not escape a global recession untouched. Yet some business leaders remain optimistic, pointing to the U.S. job market as the best indicator to watch for recessionary tremors. Indeed, the job market shows no recessionary signs at all: It was up 292,000 in December and up 2.7 million over the past year. (via the Wall Street Journal)

2. The tax man targets multinationals

Global finance leaders, take note! Google agreed earlier this week to pay $265 million owed to the British treasury, following a six-year investigation into the tech giant’s taxes. The agreement came on the heels of an announcement that the British government will institute a new 25% “diverted profits tax” on any multinational that artificially shifts profits offshore. Analysts expect the settlement could signal massive changes for how multinationals are taxed—and not just by Britain. One Australian senator said he would be “gobsmacked” if the Australian Taxation Office couldn’t levy a similar claim against Google. (via The Economist and The Australian)

3. Currency exchange volatility tops finance fears, study shows

For the first time in four years, currency exchange volatility made the cut of top five risk factors that keep finance leaders up at night, according to the 2016 risk survey by the Association for Finance Professionals. Nearly one in three finance professionals ranked it as the top risk factor, compared with just 16% in 2015. Even more worrisome: Only half of the companies surveyed have plans in place to mitigate those financial risks. (via CFO.com)

The Adaptive Insights CFO Indicator Q4 2015 report—to be released next week—shows 38% of global CFOs rank currency fluctuation as a top factor posing the greatest financial risk to their company. It was No. 4 on the list of external forces causing concern. (Download the CFO Indicator Q3 report here; check back next week for the Q4 survey report.)

4. At Davos, a digital revolution and a confidence dip

The “Fourth Industrial Revolution” took center stage at this year’s World Economic Forum, as corporate moguls gathered to discuss the new wave of digital technologies disrupting dozens of industries. Yet the excitement of revolution was tempered by tepid C-suite confidence for the coming year. Just one-third of CEOs were “very confident” in their ability to spur growth in their companies in 2016, according to a PwC survey, down from 39% last year. And just 27% said they believed the overall global economy would grow this year, down from 37% last year. (via The New York Times)

The stat: 40%

That’s the estimated representation of women in professional and managerial ranks by 2025, according to Mercer’s second annual global report. “The traditional methods of advancing women aren’t moving the needle,” the lead researcher told Forbes. “While leaders have been focusing on women at the top, they’re largely ignoring the female talent pipelines so critical to maintaining progress.” That stat lands at an interesting time: Also this week, the Securities and Exchange Commission’s chief announced that board diversity will be a top agency priority for 2016. The SEC may require companies to disclose more details about the gender and racial composition of their company boards. (via Forbes and NASDAQ.com)

Sound bite of the week

“Our markets work best when investors are provided with the necessary disclosures, and the SEC needs to take action by enforcing the disclosure rules on the books.” —Sen. Jack Reed, a senior member of the Senate banking committee, on why comptrollers, investors and lawmakers alike are criticizing the SEC’s unclear climate risk disclosure regulations (via the New York Times)

4 Top Stories + 1 Key Statistic + 1 Industry Quote = The CFO 411
The CFO 411 is our weekly news roundup that brings you top headlines, data points, and sound bites to keep you in the know. Follow our updates on LinkedIn for more finance must-reads.

 

Share this: