How has the role of CFO evolved over the past few years as a result of increased scrutiny from state and federal regulators and corporate governance requirements?
With increased scrutiny over financial results, today’s CFO also serves as the chief advocate of ethics within the organization. In this role, the CFO must promote transparency within business transactions and corresponding financial records. This entails implementing relevant policies and procedures and ensuring employees are adequately trained to understand the importance of such policies on the business operations. In addition, the CFO must consistently review and evaluate whether internal controls are effectively monitoring risks in accordance with standards established by various regulatory bodies.
Fighting against the potential for fraudulent business transactions and identity theft has also become a key function of the CFO. An example of this is found within the “Red Flags” Rule which is enforced by the Federal Trade Commission and has been in effect since January 2008. The Rule requires businesses whose activities fall within specific definitions to implement an identity theft protection program to detect suspicious patterns and transactions that might otherwise result in financial loss to an employee, customer or any stakeholder of the business organization.
What talents and credentials do you perceive as essential for a CFO to be qualified and succeed in today’s business environment?
Integrity is the most important characteristic for a CFO to possess in today’s business environment. Given the current regulatory environment, the CFO must be willing to take a tough stand on issues that may impact the reputation of the organization even if it results in negatively impacting the bottom line.
Today’s CFO should be a leader who creates a culture that encourages open communication and exchange of information within all levels of the organization. In addition to being financially savvy, the CFO must possess solid business skills and have a firm understanding of the company’s operations in order to play a proactive role in the overall business strategy. Lastly, the CFO must be adaptable to changes in market conditions and technological advances that impact the strategic objectives of the company.
How has today’s difficult economy affected your role as CFO?
As a franchisor of 380 independently owned Wireless Zone stores, the economic downturn has forced us to increase our due diligence of a potential franchisee’s finances prior to approving the application. This is essential in order to ensure that franchisees will have adequate working capital to succeed once they are operational. For established franchisees, we are continuously evaluating whether existing credit lines are sufficient to allow for the required product mixes and inventory levels to meet their local consumer demands.
From a corporate standpoint, we are closely monitoring cash flow, inventory levels and administrative expenses in order to maximize profits. This has required a more proactive approach in negotiating vendor credit lines, cash discounts and bank financing. In addition, fixed expenses are reviewed and approved only if adequate justification exists to ensure a return on investment.
What are the top challenges you face in your role as CFO?
Keeping pace with changing technology both from a product and operational standpoint is a continuous challenge. The constant surge of new products within the cell phone industry requires close scrutiny to ensure that inventory levels are properly maintained in order to meet sales demands without incurring inventory obsolescence or large write-offs.
Operationally, as new software is developed and programs are upgraded, we must continuously evaluate our information systems to ensure that the financial reporting, inventory and point of sale programs effectively interface to provide accurate, meaningful data. In addition, as we continue to grow our business within this economic environment, balancing working capital requirements and managing cost containment without stifling growth and expansion remains a constant challenge.
What aspects of your role bring you the most job satisfaction?
It is extremely gratifying to be part of a team that provides support to entrepreneurs who realize their dreams of successfully running their own business. By taking on the role of the financial coach, I work closely with my finance team to assist the franchisees in developing their own financial skill sets and provide them with the tools to utilize in their decision making process. At the corporate level, where there is very low turnover, I enjoy watching and mentoring the career progression of employees as they continue to step up to meet the many challenges and demands of our growing business.
The most rewarding aspect of my role has been in serving as a founding member and Treasurer of the Wireless Zone Foundation for Giving. Established six years ago, as a charitable organization, under the Internal Revenue Code 501 (c) (3), the foundation provides a structure for giving based on donations received by Wireless Zone Franchisees, employees and friends. Grants are given to support programs and organizations dedicated to improving the communities in which we operate and live. Since its inception, the Foundation has granted over $1.3 million to various charitable organizations.
Wireless Zone was recently recognized by Inc. 500 as being one of the 5000 fastest growing privately held companies in the U.S. I am proud to be part of a Company that has demonstrated continued growth in a difficult economic climate while maintaining a culture that recognizes and rewards its employees for their skills, hard work and dedication.
Name: Stephen J. Lewkowicz
Title: Executive Vice President and CFO
Company: Automotive Technologies Inc. (d.b.a. Wireless Zone)
Company headquarters: Middletown
Age: 59
Hometown: Manchester
Education/Credentials: BS-BU Finance, Norwich University, VT; MBA, Rensselaer Polytechnic Institute – Lally School of Technology
