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Ivanka Trump out of fashion at Canadian retailer

MONTREAL — Ivanka Trump’s clothing line is disappearing from the shelves of Canadian retailer Hudson’s Bay Company, the firm says, more than a year after some US department stores dropped the items.
“Hudson’s Bay is phasing out this brand through the fall based on its performance,” the company said in an e-mail to AFP.
“As part of our regular course of business, we review our merchandise offerings and make appropriate changes,” it said, without providing other details.
Along with its Canadian stores, Hudson’s Bay holdings in Europe and North America include US retailers Saks Fifth Avenue and Lord & Taylor.
In February last year, the US fashion chain Nordstrom said it had dropped Ivanka Trump’s line of shoes and clothing. It cited slow sales after a campaign to boycott stores doing business with the family of US President Donald Trump.
Neiman Marcus stores similarly discontinued the line.
Ivanka Trump serves as an adviser to her father.
The US president sparked outrage among many Canadians when, at the conclusion of a G7 summit hosted by Canada, he tweeted that Prime Minister Justin Trudeau was “very dishonest and weak.” — AFP

Global trade war to be a boon for Black Sea grain

MOSCOW/BEIJING — Trade conflict between the United States and China could further boost already booming grain and oilseed exports from the Black Sea region, traders and analysts said.
New opportunities to sell wheat, corn and soybeans to China and even the European Union are set to open up for the region’s main exporters Russia, Ukraine and Kazakhstan, whose recent ascendancy has already ended full US dominance in markets such as Nigeria and Mexico.
The United States and China slapped tit-for-tat duties on $34 billion of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war.”
The Black Sea region’s share of the international wheat market climbed to about 37 percent in 2017-2018, according to the International Grains Council, comfortably topping the United States and Canada combined.
China is the world’s top wheat producer but still imports about 4 million tons of the grain each year.
In the 2017-2018 season (June-May) the United States exported 902,400 tons of wheat to China, down from 1.56 million in the prior season, according to US government data.
For Kazakh wheat, the pick-up in Chinese imports started due to Beijing’s Belt Road policy and before the trade dispute took off, but the tariff row accentuates the trend.
“We have just started buying wheat from Kazakhstan this year. Our first order was for several thousand tons,” a Chinese wheat trader said. “We will see about sales and profits. If they’re good, we will increase imports for sure. It is related to the current trade war.”
“Now that you can’t bring in American wheat, it gives us more incentive to buy from Kazakhstan. And once your trading of Kazakh wheat reaches a certain volume, you get government preferential support,” the trader added.
Among the risks for this strategy are difficult logistics and unstable quality seen in Kazakh and Russian wheat, said another trader who has been looking for more Kazakh wheat deals.
Black Sea wheat may not be able fully to replace its US counterpart due to different quality grades, meaning some traders will also turn to Canadian wheat, he added.
According to statistical data, Russia and Ukraine, whose traditional buyers had been in North Africa and the Middle East, boosted wheat supplies to Vietnam, Indonesia, the Philippines, Spain, Tunisia, Tanzania, Sudan, Oman, Mexico and Kenya in the 2017-2018 season.
One location in which Russia has taken away from US wheat market share is Nigeria, which like Brazil traditionally favors a higher-protein grain such as US hard red winter.
In a sign that may worry some US wheat traders further, Brazil bought Russian wheat in July for the first time in eight years.
“In this new era of trade wars, prices talk louder than words,” said Swithun Still, director of Solaris, which specializes in trading Russian agricultural commodities.
“It’s likely that China will aim to buy more grains and oilseeds from the Black Sea and more beans from South America. Mexico has been buying lots of Russian wheat and will continue as prices are attractive compared to US wheat,” he added.
The trade spat could also boost exports of Black Sea corn and soybeans.
Russian authorities recently reported a record 850,000 tons of soybean exports to China in July 2017-May 2018, more than double the 340,000 tons a year earlier, Svetlana Malysh, Kiev-based Black Sea agriculture market analyst at Thomson Reuters, said.
“Black Sea countries, mainly Russia, may intensify their soybean shipments to China in case of any US deliveries’ disruption,” she added.
The trade conflict is also a chance for Ukraine to boost supplies of its corn to the European Union, which imposed a 25% import duty on US corn in June, Malysh said.
China can also turn to Ukraine and Russia for corn in case it reduces purchases from the United States, according to Matt Ammermann, commodity risk manager with INTL FCStone. — Reuters

Shares to move within tight range on thin volume

SHARE PRICES are seen to move within a narrow range in the week ahead, with analysts banking on an increase in trading volume for the main index to sustain its upward trajectory.
The 30-company Philippine Stock Exchange index (PSEi) gained 0.66% or 48.60 points to close at 7,399.18 on Friday, marking a 2.96% or 212.47-point improvement from the week before. Holding firms and financials supported the market last week, rising 4% and 3%, respectively.
Despite the increase, the PSEi still saw little participation as turnover only reached P24.59 billion, flat from a week ago. Foreign net selling reached P1.62 billion, slightly higher than the P1.59-billion net outflow recorded from July 2-6.
“The month of July is looking brighter and brighter as the index had another good week… We are looking at two scenarios next week. The first is that we start to see volume come in, and the index is going to try and test the next resistance at 7,500,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.
Mr. Mangun noted that reaching the 7,500 resistance will confirm the PSEi’s reversal, as well as put an end to the bear market.
“The second scenario is that investors will take gains as several blue chips have gained 10% in the last two weeks and we will see the index come back down to support at 7,185… Based on the market sentiment, the latter scenario is more likely to take place. However, the pullback that we may see next week is a great opportunity for more investors to test the waters,” Mr. Mangun said.
Meanwhile, online brokerage 2TradeAsia.com said investors will focus on developments in the escalating trade war between the United States and China. US President Donald J. Trump last week announced additional dues on $200 billion worth of Chinese goods. China has yet to retaliate from this fresh round of tariffs.
“Resolutions that would put clearer guidelines in resolving the US-China trade row will be a boost for equities, having regressed from its recent high this year. This issue is something that investors will have to deal with on a daily basis, pending clearer outcomes of talks,” 2TradeAsia.com said.
It added that earnings results for the first half are soon to be released, advising investors to hunt for stocks with “good fundamental merits and solid upside potential.”
Eagle Equities’ Mr. Mangun expects support to be at 7,340 down to 7,185, while resistance could reach 7,400 to 7,500.
US stocks rose slightly on Friday, putting the S&P 500 at its highest closing level in more than five months, as gains in industrials and other areas offset a drop in financials after results from three of the big banks mostly disappointed.
The Dow Jones Industrial Average rose 94.52 points or 0.38% to 25,019.41; the S&P 500 gained 3.02 points or 0.11% to 2,801.31; and the Nasdaq Composite added 2.06 points or 0.03% to 7,825.98. — Arra B. Francia with Reuters

Peso seen moving sideways

THE PESO is seen to move sideways against the dollar this week ahead of likely mixed economic data in the US as well as key summits abroad.
The local unit ended Friday’s session at P53.51 per dollar, a centavo weaker than its P53.50 finish the previous day.
Friday’s close was also weaker than the P53.42-per-dollar finish on July 6.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK), said the peso-dollar exchange might move sideways.
“The dollar is expected to move sideways this week, with a downward bias, as likely mixed economic and geopolitical signals abroad might prompt investors to lock in the dollar’s recent gains,” Mr. Dumalagan said in an e-mail over the weekend.
He said the peso might trade stronger in the first two days of the week as its US counterpart might depreciate following last Friday’s weaker-than-expected US consumer sentiment and ahead of “likely softer” US retail sales.
According to the University of Michigan’s monthly survey, consumer sentiment dropped to its six-month low of 97.1, lower than the 98.2 market consensus in a Reuters poll, on the back of rising concerns over trade spats between the US and its main trading partners.
“The dollar may also shed some of its recent gains, as critical meetings among world leaders could potentially end well, improving investors’ risk appetite,” Mr. Dumalagan said.
US President Donald J. Trump is scheduled to meet with Russian President Vladimir Putin in Helsinki, Finland today.
Meanwhile, the European Union will meet with Japan in Tokyo to sign a free trade accord. The bloc will also discuss trade and investments with China in a summit in Beijing.
“The three summits this week involving the US, EU, China and Japan are expected to receive mixed interpretations, although they may generally reinforce the message of greater economic cooperation among countries, despite ongoing trade issues,” Mr. Dumalagan added.
However, he noted the dollar’s decline might be tempered by “likely softer” gross domestic product growth of China as well as safe-haven buying due to lingering trade tensions.
Toward the end of the week, LANDBANK’s market economist said, the greenback may bounce back supported by likely hawkish speeches from Federal Reserve officials amid mixed US economic data and possible inflation uptick in the Eurozone.
“[Fed officials Jerome Powell and Randal Quarles] are expected to affirm views of two more US rate hikes this year,” Mr. Dumalagan said.
For this week, Mr. Dumalagan sees the peso moving between P52.95 and P53.65 versus the dollar, while a foreign currency trader gave a P53.30-P53.55 range.
“If the dollar globally will just range, the peso might just track that move,” the trader noted in a phone interview on Friday. — K.A.N. Vidal

How PSEi member stocks performed — July 13, 2018

Here’s a quick glance at how PSEi stocks fared on Friday, July 13, 2018.

Comparative daily minimum wages of select Asian economies

Comparative daily minimum wages of select Asian economies

DoF open to LGUs takeover of nat’l gov’t functions

THE FINANCE department is open to devolving some functions of the national government to local government units (LGUs) to comply with the Supreme Court ruling on internal revenue allotments (IRAs).
“We need to sit down with the LGUs and work out what programs they will implement… we will look at the proposals and then we have to ask the cabinet (to determine) how we will divide the functions,” Finance Secretary Carlos G. Dominguez III told reporters late Thursday.
Luzon Regional Development Committee Chairman Hermilando I. Mandanas, a former Batangas governor and for representative for the province’s 2nd district, proposed to devolve some of the national government’s functions to LGUs.
Mr. Mandanas, who filed the petition with the Supreme Court that led to a ruling expanding LGU entitlements to national government revenue, proposed that the implementation of conditional cash transfers, farm-to-market roads, fertilizer subsidies, and medical equipment procurement, among others, be transferred to LGUs.
However, Mr. Dominguez said: “I don’t know if the President will agree.”
He noted that the department will wait for the final resolution from the high court before making any moves.
“The motion for reconsideration (MR) depends on what comes out… The court might say that the rulling applies 10 years from now so why will we file an MR? But we can’t afford a one-time payment. For sure we cannot afford that,” he said, referring to the possibility that the national government may have to pay arrears to LGUs dating back to the 1992 enactment of the Local Government Code.
“The key actor here is not us, the key actor here is DBM (Department of Budget and Management). They are the ones to determine who is going to be affected. If there’s money, it’s fine. Then they can allocate the budget,” Mr. Dominguez added.
He said that the Finance department estimates the total liability of the national government at between P1-1.5 trillion since 1992, the effectivity date of the Local Government Code, or Republic Act No. 7160.
The estimates are similar to those provided by Mr. Mandanas and Budget Secretary Benjamin E. Diokno.
The court expanded the definition of national government revenue to which LGUs are entitled. The national government pays out the LGU share of national revenue via IRAs.
The high court, sitting en banc, announced on July 3 that it voted 10-3 in favor of including all national taxes in the calculation of IRAs, not just those collected by the Bureau of Internal Revenue.
Mr. Dominguez also expressed doubts about some LGUs’ capacity to deliver their own programs, and noted that devolving some functions should not affect other national government projects.
“We also don’t know what functions they will take over. We cannot just give them the money and say: ‘We’re leaving you in charge.’ I don’t think we can do that,” he said.
“This is a lot of money. It will not really starve (the government of revenue), but it will be difficult. And again, we have to make sure that the national projects, like the roads, are going to be coordinated,” he added.
Many LGUs are dependent on IRAs as their primary source of revenue, even though the law allows them to generate taxes on real property and on businesses, among other fees and charges.
“Not everybody is created equal. Some are very good. Some are not, some have political problems,” Mr. Dominguez said. — Elijah Joseph C. Tubayan

End of Kuwait OFW ban to raise May remittances — HSBC

By Melissa Luz T. Lopez
Senior Reporter
REMITTANCES may have grown by over 9% in May following the lifting of a deployment ban on overseas workers to Kuwait, HSBC Global Research said.
Bank economists estimate a 9.2% increase in remittances from overseas Filipino workers (OFWs) for the month. If realized, this will follow a 12.7% increase posted in April, when money sent home by OFWs hit $2.347 billion.
The Bangko Sentral ng Pilipinas (BSP) will report latest remittances data today. Remittances totaled $2.31 billion in May 2017, up 5.5% year on year.
HSBC expects a sustained recovery for these cash transfers, sustaining year-on-year growth since a 9.8% contraction recorded in March. Month-on-month growth for May is expected to come in at 7.5%.
“Remittances growth has been robust across regions with the exception of the Middle East, where remittances have declined on a yearly basis since the beginning of the year due partly to restrictions on Overseas Filipino Workers’ deployment to Kuwait at the start of the year,” HSBC said in a report released over the weekend.
“We expect this to recover toward the end of the year now that the ban has been lifted and for remittances growth to remain broadly in line with its historical trend of 5-6%.”
Remittances from the Middle East dropped 10.5% over the past few months to $2.249 billion from $2.512 billion during the same year-earlier period after a repatriation order issued by President Rodrigo R. Duterte for Filipinos in Kuwait in February, followed by a deployment ban amid reports of abuse.
The ban was in place for several weeks until the two nations signed an agreement in early May. In the interim, remittances from Kuwait declined by 8.9% from a year earlier.
Cash transfers from OFWs provide extra money for their families back home, supporting domestic activity and overall economic growth. The remittances also help offset imports and help improve global trade balances.
Remittances have totaled $9.353 billion as of the end of April, up 3.5% from a year earlier.
The central bank expects remittances to hit another all-time high and grow by another four percent in 2018, a record $28.06 billion in 2017.
In the four months to April, the United States remained the biggest source of remittances with a total of $3.167 billion, followed by Saudi Arabia ($745.771 million), United Arab Emirates ($733.906 million), Singapore ($581.005 million) and Japan ($510.665 million), according to BSP data.

SRA seeks imposition of retail price caps for sugar

THE Sugar Regulatory Administration (SRA) is asking the Department of Agriculture (DA) to include sugar in the list of agricultural products that will be subject to the department’s suggested retail price (SRP) system.
In a statement over the weekend, SRA Administrator Hermenegildo R. Serafica said that an SRP for sugar will “ensure that the consumers are protected and not taken advantage of.”
“The high prices of sugar are brought about by the erroneous perception being circulated by enterprising individuals that there is a shortage in sugar,” he added.
“Some are taking advantage of the issue of the lack of sugar for bottlers and using this to raise prices even for standard refined and raw sugar, where there is no shortage.”
The SRA monitors sugar prices in supermarkets three times a week, Mr. Serafica said. It found a grocery chain that has set “exorbitant prices well above the prevailing price” on the sugar, though he did not identify it.
As of June 10, the SRA’s data indicate a prevailing prices for raw sugar in wet markets and supermarkets at P50 per kilogram (kg) and P55 per kg, respectively.
Both the SRA and DA pointed to speculators as the reason behind rising retail prices amid low farmgate prices.
“The shortage is in the bottlers’ grade or premium refined sugar required by beverage companies such as Coke. This type of sugar has very specific quality requirements and standards that can be met by only a handful of sugar refiners in the Philippines,” he added.
“Since it is the end of the milling season, our refiners are constrained by the availability of bagasse to fuel their boilers for refining.”
Bagasse is a byproduct of sugarcane fiber after cane juice is extracted.
In June, the SRA allowed the importation of 200,000 metric ton of sugar.
Last week, Agriculture Secretary Emmanuel F. Piñol said that the department is considering a review of the sugar importation policy.
He alleged that traders who were supposed to supply sugar to bottlers and processors redirected their stocks to the commercial market instead.
Mr. Piñol also said last week that the DA is set to review other farm commodities “with volatile prices” which can be put under an SRP regime. The DA is looking into poultry and hogs as the next group of agricultural goods for which price ceilings will be set.
Eight commodities — regular-milled rice, some types of fish, onion and garlic — currently are sold under SRP rules. — Anna Gabriela A. Mogato

DPWH pushes for CALAX partial opening by Dec.

THE Department of Public Works and Highways (DPWH) is pushing for the completion the Laguna segment of Metro Pacific group’s Cavite-Laguna Expressway (CALAX) project by December despite construction delays caused by heavy rains.
Public Works Secretary Mark A. Villar told reporters after an inspection of the site on Saturday the December target is “doable.”
“There are challenges like the weather. But so far they have been resolved… We expect to fast-track the construction of CALAX, Mr. Villar said.
The president of MPCALA Holdings, Inc. told reporters in early July the construction of segments 7 and 8 of CALAX, which are on the Laguna side, is now 45% complete, though delays are expected.
“The target as you remember is December 2018 for segments 7 and 8. But because it’s raining every now and then, the most likely completion date would be first quarter next year,” MPCALA President Luigi L. Bautista said on July 5.
He added, “Very soon we will be launching the impoundment works. The impoundment works are critical there because it’s already raining. We have to build the impoundment so we can complete the carriageway.”
Mr. Bautista noted, however, that the original timetable is to have the CALAX completed by December 2020, so the expected delay is still within those bounds.
The Laguna segment of CALAX stretches from Laguna Boulevard to Mamplasan, Biñan. It is expected to cut travel time between the two points to 10 minutes from the current 20 minutes.
As for the Cavite segment, Mr. Villar said construction is expected to begin by the third quarter after an environmental compliance certificate (ECC) was issued by the Department of Environment and Natural Resources (DENR).
“We’ll start initial construction this year. As soon as we get the ECC, we’ll begin construction. We’re just waiting for the writ of possession from the courts,” he said.
He added that the right-of-way for the Cavite segment is expected by mid-2019.
The Cavite segment of CALAX covers the 28-kilometer, four-lane road with bridges, interchanges, toll plazas and ancillary facilities.
The CALAX project is a 45.29-kilometer four-lane toll road that will connect the South Luzon Expressway (SLEx)-Mamplasan interchange to the Cavite Expressway (CAVITEx).
MPCALA Holdings, the tollways unit of Metro Pacific Investments Corp. (MPIC), is the government’s private concessionaire for CALAX.
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

E-vehicle industry sees 2018 as ‘tipping point’

By Victor V. Saulon
Sub-Editor
THE Electric Vehicle Association of the Philippines (EVAP) expects sales of electric jeepneys to hit 500 units this year, up from the 200 in 2017, with the group expecting a “tipping point” for the industry.
Rommel T. Juan, EVAP president, said the industry’s optimism is largely brought about by the public utility vehicle (PUV) modernization, which is expected to boost sales of the four-wheel electric vehicles after a slow start in recent years.
“Maybe by the end of the year, we’ll be able to release about 500 units,” he said in an interview. “There were only few units released last year, maybe less than 200.”
EVAP has 57 active members, most of whom are involved in local production, assembly, supply and distribution of electric vehicles and parts.
“This year is the tipping point, with the PUV modernization and the deployment of the DoE (Department of Energy) electric tricycles,” he said.
The Department of Transportation’s PUV modernization program has a target to upgrade around 200,000 public utility jeepneys in the next six years, about 10% of which will be electric jeepneys. To support the scheme, the Department of Trade and Industry and the Board of Investments are putting in place an Eco-PUV program to provide incentives to both the electric vehicle platform suppliers and body builders.
The DoE has committed to deploy around 1,600 to 1,700 units to the local governments of Marawi, Valenzuela, Muntinlupa, Las Piñas and Pateros. This will come from the 3,000 units that the government contracted with Japan’s Uzushio Electric Co. Ltd. and its local unit Bemac Electric Transportation Philippines, Inc. The rest of the units have not been committed but the DoE is considering a number of applications.
“In the automotive industry it has to be seen first. When you see the vehicles, that is when you would want to buy. The more vehicles we have on the road, the more demand will happen,” he said.
Mr. Juan said since the country started manufacturing electric-vehicles, a total of 5,000 have been produced by local vehicle makers, most of which are electric tricycles. He said about 15,000 electric motorcycles are imported each year on average.
He said the PUV modernization resulted in inquiries from dealers, who are fast-tracking the manufacture of electric jeepneys.
He said many members of EVAP are currently enjoying the income tax holiday being offered by the government, but the association continues to ask for tax- and duty-free importation of electric vehicles.
“Six, seven years that we’ve been pushing for it,” he said.
He said the 30% tariff on EVs is what the association is asking to be removed plus the import taxes and duties for vehicle parts such as the motor, controller, charger and batteries. If these incentives are given, he said EVs would be more competitive.
For instance, the cost of the Outlander model of Mitsubishi Motors Philippines Corp. will go down to P2.5 million from the P3.4 million with the existing taxes, he said.
“In other countries, [the electric vehicle industry] is a highly subsidized industry and that is really the price you pay if you want to improve the environment and to promote low carbon initiatives of electric vehicles,” he said.

Synergy between the CFO and CEO

A mentor once said, to create value in an organization, the following must be present: strong leadership, strong partnerships that break organizational boundaries, and a perfect opportunity to exploit. In this article, we would like to discuss how a strong partnership between the CFO and the CEO can help companies adapt to the continually changing business landscape.
KEY ALLIES IN VALUE CREATION
When new opportunities and threats, such as digital, are transforming whole sectors and causing CEOs to question their strategy, operating model and team, CEOs need a firm ally and business partner by their side. One such partner is the CFO, who can be a strong advocate and support for growth. CFOs can be strategic advisors to the CEO, being aware of where the market and competition is heading.
Surprisingly though, in a survey of 652 CFOs across the world, EY found that while a majority of CFOs have increased collaboration with the CEOs and report greater involvement in corporate strategy driven by a focus on growth, CFOs still consider their most significant contribution as being cost discipline champions and managing budgets.
CFOs need to strike a balance between control and growth. They need to be able to display agility and flexibility — both personally and organizationally, as the organization’s strategy and economic situation evolve. Tony Klimas, EY Global Finance Performance Improvement Advisory Leader, has seen this tension at play in many organizations. In his experience, the CFOs that have successfully made the transition to business partner are those that have taken a step back from finance operations, and are focused on taking a strategic view on how they build and structure the finance function.
“To partner in a strategic way with the CEO, CFOs need to redefine the principles of the finance function,” Tony says. “Many CFOs have the will and the drive to be a business partner to the CEO, but the change just can’t come from them. They need to ensure the larger finance function has a balanced skill set that covers cost control, treasury, analytics and strategic forecasting. The CFO should be able to trust his finance leadership team and keep some distance from each of these activities in order to dedicate more time to collaborating with the CEO on strategic matters.”
For CFOs to maintain their role as a key ally to the CEO, CFOs must always be at the table during key discussions or asked for their input on strategic decisions. According to the same CFOs survey respondents, organizational boundaries and a lack of demand from CEOs for insight from finance into strategic issues are the top two barriers preventing a closer relationship between the CEO and the CFO.
The onus on the CFO to become a value creation-focused business partner to the CEO falls upon them both. So what does it take to become trusted allies? Commitment must be made by both parties to strengthen the CFO-CEO alliance:
• CFO commitment — Develop the right strategic skills and mind-set and build a finance function with the right balance of skills to give the finance leaders the breathing space to step away from the details.
• CEO commitment — Break down the organizational barriers that CFOs still perceive as barriers and rethink the contributions they require from their CFOs.
DRIVING AND ENABLING THE SHIFT TO DIGITAL
Digital technologies do not respect tradition. They destroy hierarchies, trample over sector boundaries, democratize information and make large, traditional businesses ask hard questions surrounding their own companies’ future and relevance. And digital technology is only just getting started. That said, CFOs and CEOs must develop a strategic response to external risks and opportunities and disrupt their own organization’s business and operating models. Both should know how digital can create new sources of value. Surprisingly, of the 652 CFOs surveyed, only 50% consider the shift to a digital business model to be a high or very high priority for their organization, and less than half feel they make a significant or very significant contribution to the shift to a digital business model. This suggests that CFOs have yet to recognize the impact digital is likely to have on their organization, or what their role is in positioning the organization to adapt and secure its relevance.
While many CFOs surveyed feel that digital sits outside their area of responsibility, they should realize that they can play an important role in championing and embedding digital within their organization. Some of the digital priorities that both the CFO and the CEO can work together on include:
1. Develop a business strategy that is fit for a digital world and make the disruptive investment calls required, including developing and managing a portfolio of digital investments with a variety of profiles, from quick wins to strategic bets.
2. Use data analytics to anticipate digital disruption, measure performance and respond quickly. CFOs are uniquely positioned to gather and analyze data from across the organization, which can provide an early warning indicator of any potential disruptive threats and opportunities. By sharing their insights, CFOs can help the CEO and the organization better develop strategic responses and consider pre-emptive changes to the business model in the face of increasing competition.
3.CFOs and CEOs can work together to create a governance framework that puts digital at the heart of the business, including management decision making. Currently, many organizations’ governance arrangements still do not take into account the digital economy. This includes assessing the readiness of the board for digital leadership, the overall digital talent pipeline and whether the existing digital capacity is enough to ignite digital business model innovation. Ruby Sharma, a Principal for the EY Center for Board Matters, says digital experience on the board can help guide management through changes in business models and disruptive forces.
4. Manage the tax, legal and regulatory risks of digital and support digital growth plans. It is absolutely important that CFOs, together with the Tax Directors, sit down with the CEO to explain how changes in the business model will transform their tax model. This will help ensure that risks are anticipated, while at the same time, help develop tax strategies that support digital growth ambitions. Not doing so poses greater controversy, including intense media and regulatory scrutiny and the risk of reputational damage.
As we can see, creating a powerful synergy between the CFO and the CEO, and potentially, other C-level executives, can redound positively on a business’ overall performance.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.
 
Rossana A. Fajardo is the Advisory Service Line Leader of SGV & Co.

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