Managing Financial Risks and Taxes
CFOs CAN DIRECTLY IMPACT THE COMPANY's financial performance through their management of financial risks and taxes. In managing these key functions, they are pursuing the twin goals of lowering costs and reducing volatility.
Both of these objectives can add shareholder value, but they often entail tradeoffs that the CFO must weigh carefully.
Purchasing third-party insurance is one of the most common mitigation strategies employed by companies against their enterprise risk exposures. Managing the insurance program is normally within the purview of the CFO, who is responsible for recommending the types and amounts of insurance to acquire and the amount of risk to be retained through self-insurance and deductibles. In addition, the CFO normally will partner with the general counsel in negotiating the terms for the policies that are purchased.
Types of Insurance
For most companies, the insurance policies typically will include: