Conscience, of course, isn't the first thought that springs to mind these days when the job of CFO is mentioned. Accounting scandals, failed promises and wretched equity performance have strained corporations' credibility with investors, government regulators and the public.
Hommen, however, is a part of a small band of European finance directors who have distinguished themselves in a horrid operating environment. It's not necessarily that their companies have performed the best -- Philips shares, for instance, have declined more than 60 percent in the past three years -- but that these individuals have continued to inspire investors' trust by clearly and honestly communicating their plans and vigorously implementing them.
After polling brokerage analysts and fund managers, Institutional Investor this month recognizes outstanding finance directors, like Hommen, in its inaugural selection of Europe's best CFOs (see page 60). Perhaps the examples set by the Philips finance chief and his fellow honorees can in some measure help mend the damage done to corporate credibility.
More than ever, CFOs need to court equity analysts at major investment management firms. If these researchers don't subscribe to a company's message, they have the power to steer their firms' money elsewhere. And they, too, are laboring under tough conditions. As the second half of 2003 nears, Europe's stock markets face the possibility of a fourth consecutive down year. What's more, these investors have to survive bad markets with less support from embattled brokerage research departments.
Who's meeting the challenge? Starting on page 73 we present our annual choices for "The Best of the Buy Side," the most-outstanding equity analysts working for asset management firms.
The work of Hommen and his cohorts is also getting the once-over from bond analysts. The record number of credit downgrades -- more than a few caused by shoddy accounting practices -- has made picking individual corporate bonds a nightmare. In the eyes of investors, the members of II's 2003 All-Europe Fixed-Income Research Team (see page 87) have done the most to avoid disaster while pinpointing a few winning plays. These days that's all an analyst -- or a CFO -- can shoot for.
