In this undated file photo, He Haijian, chief financial officer of Kingsoft Cloud, speaks at an industrial forum. (PHOTO PROVIDED TO CHINA DAILY)

A sharing event, part of the CFO Salon series, was held at the School of Economics of Peking University in Beijing to explore how CFOs’ personal growth and capital operation experience could be used to help tackle challenges.

At the Feb 25 salon, which was the first since the pandemic, He Haijian, chief financial officer of Kingsoft Cloud, shared his insights into how the CFO community can stick to the fundamentals, think outside the box and explore ways for companies to achieve a breakthrough

To be successful in the role, a CFO needs to understand the company’s internal and external environment and leverage the resources on hand, and, more importantly, set the priorities for the path to success, with different parties

He had accumulated rich working experience in global bulge bracket financial institutions from New York to Hong Kong before joining Kingsoft Cloud in 2020, with his most recent role being head of mergers and acquisitions transactions at Goldman Sachs, advising corporations and private equity investors on cross-border and complex buyouts, asset disposals, joint ventures and privatization deals. He also served on the TMT investment banking team at Bank of America Merrill Lynch in Hong Kong and worked on the trading floor at Citigroup in New York.

Insights into opportunities

He has followed a somewhat "atypical" career path for a CFO. His academic background is in electronics engineering, when he specialized in signal processing in neutral networks, programming in MATLAB for chip designing and testing. When 3G technology was introduced, the telecommunications industry transitioned from analog to digital signals. His immersion in a basic technology framework in his early life has proved very helpful to He in his current C-suite role in a cloud computing company.

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He's true career began at an investment bank in New York, where he was responsible for derivative trading in the market and trading departments. He withstood the test of the global financial crisis, during which he honed his professional skills in financial risk management. During the next period of his career, he was able to grasp industry opportunities at various stages of economic transition.

Experience and advice

The last several years of the pandemic undoubtedly proved challenging for businesses, with many in certain sectors still struggling. After leading the company’s successful IPO in the midst of the pandemic in early 2020, completing several major strategic investments in the technology space in 2021, and implementing several new strategic and operational initiatives for the company post-pandemic, He feels in a position to share some of his thoughts of reflections. 

Priorities to confront the uncertainties

Industries have experienced very uncertain and volatile times during the pandemic. The magnitude of the change has been both impressive and broad. Strong financial management is something any company needs to survive during hardships, thrive when all business goals are met, and continue improving.

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First of all, there appears to be a greater need for making trade-off decisions. Therefore, the tactic of the CFO should be to make those trade-offs transparent to stakeholders, and provide insights for the team to make decisions free from bias. Second, the CFO needs to recommend where to spend and, just as importantly, where to save, in the current climate.

More importantly, the modern CFO should be grounded in all operational and performance elements of a company. With that underpinning, a CFO is much better positioned to identify opportunities and shepherd value-creation plans.

Demystify the valuation and shareholders relationship

CFOs are staying ahead of the capital market and providing quarterly results to the public.

On the one hand, they should be good at communicating with internal teams and external stakeholders. On the other hand, the intrinsic value of a company resides in the value of the products and services they provide to their customers, coupled with the output’s full range of financial indicators.

While helping the market understand the information is the daily job of a CFO, finding the right investors who understand, and potentially agree on, the framework for analyzing the value of the company is equally important. To add to the complexity, in the midst of the turmoil in the capital market in the past year, the valuation formula has shifted from growth to profitability, and at different speeds due to investors having different risk appetites and sector preferences. CFOs will have to be more proactive to expand the investors’ universe, listen carefully to feedback and good advice from various stakeholders, and make wise decisions to bridge expectations with business operations, in a reasonable timeframe with real results.

Art of balancing priorities and fulfilling growing responsibilities

CFOs have a plethora of responsibilities. CFOs provide in-depth reviews of your business model and balance sheets. They work with the board of directors, prepare detailed financial and strategy reviews, work with auditors, oversee financial planning, and set policies around controls and firmwide processes. A CFO can bridge the needs of the company’s founders, shareholders, and customers.

To be successful in the role, a CFO needs to understand the company’s internal and external environment and leverage the resources on hand, and, more importantly, set the priorities for the path to success, with different parties.

A CFO constantly provides the organization with the essential data needed to help it make better and more informed decisions. He or she also assists with creating an end-to-end strategy that includes specific actions and how to go about implementing them. A CFO works with other senior managers and is a vital participant in a company's overall success.

There are growing portfolios of responsibilities nowadays for CFOs. For example, the intersection between financial management and company strategy is more acute than ever post-pandemic, and CFOs need to place more emphasis on linking finance and strategy in the budgeting cycle, and closely dive into executions to ensure success for the company and shareholders.