Bloomberg TV Interview, September 16, 2013
Frank Friedman, chief financial officer, Deloitte LLP, discusses top of mind CFO issues including capital, business partnering and healthcare on Bloomberg TV’s CFO Week segment, “Taking Stock with Pimm Fox.”
Pimm Fox, Anchor, “Taking Stock with Pimm Fox:” It is CFO week here on Bloomberg Television. We’re going to be speaking with some of the biggest names in American business here on “Taking Stock” and throughout the day. Joining me now is the chief financial officer of Deloitte LLP, Frank Friedman. Deloitte is the nation’s largest professional services organization. They advise more than 70 percent of the Fortune 500 in topics including capital strategy, taxes, and financial reporting.
Frank Friedman, welcome to “Taking Stock.” Thanks for coming in.
Frank Friedman: Thank you very much.
Fox: I gotta start off by asking you, what does the chief financial officer at Deloitte do?
Friedman: Well, not too different than most chief financial officers. We’re a little different; we’re a private company. We’re not a public company. We don’t deal with investors or analysts. But, I do have 3,000 partners that come to work every single day, and they understand accounting and they understand finance; they understand consulting. And so, it’s a very educated [uh] shareholder group, if you will. We’re not different; we have the same sort of finance structure. I deal with capital planning. I deal with cash forecasting, budgeting. Some untraditional things coming in to the CFO—it’s becoming a little bit more traditional—so I’ve got, as well, administrative functions like real estate and procurement.
Fox: So, what are some of the topics that you’re having to deal with when you come to the 3,000 people that might call you on the telephone? Is it things like healthcare? Is it things like changes in tax policy? What is at the top of your list right now?
Friedman: I think, generally speaking, it’s certainly retirement; it’s certainly capital. But, I think what CFOs and our partners expect of me, and I think CFOs are having to do, is start to move up the food chain a little bit. I call it going up and going broad. And so, people have thought that we are stewards of our assets and that we are operators, but I think, to be relevant, CFOs are becoming more strategists, more catalysts, and I think our partners expect me to do something similar—so, all the traditional things, but probably broader than a traditional CFO has been.
Fox: In other words, be more active in the actual, ongoing business of the company?
Friedman: And, as a consequence, be more relevant. And so, moving up and crossing the boundaries of finance into the business areas makes a CFO more relevant and it makes me more relevant. It makes any CFO, actually, more relevant, and it gets you involved in the day-to-day business operations, especially the strategies that, often times, CFOs have not chosen to do.
Fox: How did you end up becoming the CFO at Deloitte? What was the route that you took?
Friedman: Well, I wasn’t necessarily in a finance function. I started with Deloitte, actually, a long time ago, in 1979. And so, I’d been a career Deloitte person. I was client service, client service—that’s how—and if you were good enough at client service, eventually, it took you out of client service and you became more involved in certain administration activities. I ran offices; I ran regions. And, eventually, it kind of migrated to financial operations.
Fox: Now, the offices, for example, at Deloitte here in the United States, but we know that Deloitte is a global firm—you even have operations, for example, in India that you are connected with. Tell us about that.
Friedman: Well, we are certainly global. We have operations in over 100 countries. The U.S. firm has operations here, has operations in India, as well, and so, we play in various global markets, and we’ll continue to play in various global markets under the umbrella of Deloitte Touche Tohmatsu, which is our global organization.
Fox: What’s the fastest growing region right now, geographically and by industry?
Friedman: The relevance of geographic has become less as we become more global and national. So, we actually look at it much more in terms of service areas and service lines. We have two fundamental businesses: the trust business, which is attest, audit, tax, and then the advisory sorts of businesses, which are consulting. Clearly, the consulting has been the growth engine for the firm over the last few years, and particularly in areas such as technology, human capital, and strategy and operations.
Fox: And does it also take into account, obviously, government regulation and how companies must live with ongoing changes in government policies?
Friedman: A lot, yes. We have groups that all they do is advise companies on how to comply with rules and regulations, state and federal.
Fox: And October the 1st is the introduction of new healthcare reform legislation around the country. Have you been getting a lot of questions about this?
Friedman: We have, and we’ve been very active. The state exchange has opened up. People can start enrolling on October 1. It’s a big day for the country, and we’re looking forward to it with some optimism as to what will transpire.
Fox: I want to thank you very much for joining me.
Friedman: It’s been my pleasure.
Fox: Speaking to Frank Friedman, the chief financial officer of Deloitte.
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As used in this document, 'Deloitte' means Deloitte LLP [and its subsidiaries]. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.Certain services may not be available to attest clients under the rules and regulations of public accounting.