By CPA Pauline N. Kahwai
Corporate Finance focuses on using financial resources to maximize shareholder value. This is achieved when increased value is reflected in rising dividends and share prices. By making ‘real’ investments with the highest returns, the main objective—maximizing shareholder wealth—is possible. The primary indicator of success is a positive Net Present Value of cash flows.
Strategic financial decisions may be made regarding the level of investment in the business’s assets and the types of assets to acquire. The most appropriate methods include debt or Equity, profit retention, profit distribution, and Gearing or Capital structure of the business. Therefore, the question that begs to be asked is: What data do we need to make a robust decision? The most appropriate answers are,
- High-quality &timely information to make a decision
- Critical success factors include the appointment of a new CEO, achieving a high market share goal, and integrating Internet Communication Technology (ICT) across the business.
- Key performance indicators include Gross profit % increase, overall cost reduction, Turnover growth, Debit and Credit days, and Return on Earnings increment in percentage terms.
To achieve this, a framework is needed for setting goals that are Specific, Measurable, Attainable, Relevant, and Time-bound (SMART).
Specific: – there is a need to have clarity of what is to be accomplished, who is responsible, and each step to be undertaken defined.
Measurable: – The objective should be quantifiable; thus, progress is easily tracked and success determined.
Achievable: – The goal or objective should be realized and attainable based on the available resources, knowledge, and skills.
Relevant: The objective aligns with the organization’s core business, mandate, and vision at this time.
Time Bound: The completion date is defined, accompanied by small milestones, and progress can also be tracked through a Gantt chart.
Sustainable Finance & Finance Crime in Finance of Non-Finance CEO
As we delve deeper into addressing risks in lending, we find that investors use non-financial criteria to select green or sustainable investments, as well as investments with low environmental and sustainable risk. Green or sustainable indexes used non-financial environmental, social, & Governance to select investments (Weber and Feltmate 2016). Therefore, Environmental, Social, and Governance (ESG) has evolved from being a niche activity for specialized investors and asset managers to a general Financial Risk and Opportunity assessment tool applied by conventional institutions, such as Pension Funds and Large asset Managers like BlackRock, Inc., a multinational investment company founded in America in 1988.
Behavioural Finance in the Finance of Non-Finance CEO
The Finance for Non-Finance CEO’s also touches on Behavioural Finance, which is a study of the influence of psychological factors, emotions, and cognitive biases on financial decisions. A good example is when a CEO leads through dialogue, as described in the scenario on leading through dialogue.
Leading Through Dialogue in Behavioural Finance of a Non-Finance Executive
A Non-Finance CEO may have the right people in the room or on the line. How do you get everyone, as the cliché goes, on the same page? Dialogue. Sharing sensible information that matters within the organization, honest and without a hidden agenda. Through this honest conversation, information can be shared, assumptions clarified, and disagreements addressed to ensure all facts are presented accurately. Dialogue can lead to new ideas as people trigger one another’s imagination and build on one another’s comments. Out of which trade-offs or decisions get made. Indeed, the tone and content of dialogue shape people’s behaviours and beliefs, which result in corporate culture more quickly and, more importantly, than any other reward system, structural change, or vision statement.
How then can a CEO create the right kind of dialogue? This is achieved by providing a model where the conversation is open and honest, which leads to a decisive dialogue in each encounter with teammates and other employees. When consistently practised in social operating mechanisms, the CEO can share what is on their mind, solicit others to do the same by asking questions in a non-threatening manner, and thus establish clear lines of accountability.
The CEO, at the same time, can use the dialogue to provide feedback, recognise high achievers, redirect those who are blocking the Institution’s progress, and coach those who are struggling. These approaches will not only create harmony but also serve as a reasonable driving force towards achieving the assigned mandate, being one of the best strategies the Institution can employ to boost not only financial gains but also economic and societal values for all stakeholders.
A recent and live example is the Kenyan Government’s negotiation of a currency swap loan from the US Dollar to the Yuan currency in a fruitful dialogue that has led to a surging share of the US Dollar in the Kenyan Shilling, amounting to 850 billion (Eight Hundred Fifty Billion only). This occurred after the renminbi (RMB) or Yuan markets deepened, and Kenya sought to reduce its dollar exposure and interest rates. Business Daily, Monday, October 13, 2025.
Finance for Non-Finance Chief Executive Officers in Digital Finance
Computerised trading and the evolution brought about by the rise of the internet, mobile payments, and blockchain technology have been a wake-up call for non-finance CEOs to evolve in their professional roles and adopt Finance and accounting in their leadership. This required investment in digital infrastructure, data governance, and human capacity building to drive and achieve institutional goals effectively. The introduction of automated systems notably enhanced the processing speed of financial transactions and improved transaction efficiency. Automation technology enabled the implementation of more sophisticated transaction risk control and market analysis, as well as robust support for the rapid development of financial operations.
The emergence of online banks and securities companies has made the financial markets more open and transparent, covering a broad audience, reducing costs, and providing personalised services. The Massive investment in artificial Intelligence (AI) will make the world a better place in terms of technology. The reality is that while booms occur, such as the global financial crisis of 2008, they often accelerate the development and deployment of new technologies and also produce painful busts. OpenAI boss Sam Altman acknowledges that some institutions and people are going to lose “a phenomenal amount of money” when the AI bubble bursts. The saying that certain bubbles are inherently benign is the thesis of the recently published book Boom: Bubbles and the End of Stagnation by Byrne Hobart and Tobias Huber.
What the Non-Finance Manager should embrace is that bubbles are good and valuable because they induce institutions to take more risks. On the other hand, businesses face increased risks, and to mitigate these, the CEO must have preparedness and planning in place, including a disaster recovery plan, a risk management plan, and a business continuity plan, thereby reducing risks such as cyberattacks and economic downtime.
Climate Finance and its risks in the Finance of Non-Finance CEO
Climate risk strategies, such as those involving fossil fuel financing and divestment, encompass financial products and services that actively address climate change, as well as divestment from engaging with investees that have high greenhouse gas (GHG) emissions. For example, in big oil companies, the CEOs in place are mostly Mining and Petroleum engineers who are expected to run the respective institutions.
The question is: how do they expand capacity through flawless execution in the art and discipline of getting things done and impacting the Institution’s culture of growth?
Whereas understanding how to make money is one thing. Making it happen, getting it done, executing it- is a different thing altogether. The solution should embody the good practices of what a CEO with an excellent business understanding does instinctively. Apply the universal laws of business, as they set the way forward and guide the selection of the right priorities, enabling the organisation to grow profitably.
In conclusion, the success of any organization hinges on having the right people in the right roles. The modern corporation is built on this very principle, relying on professionals who apply their unique talents to drive success. When a decision-maker is unsuited for their position, the quality of their decisions declines, and the entire company suffers as a result.
Conversely, a well-suited individual will continuously improve, grow more proficient, and expand their capacity. If this principle is applied consistently throughout a company, the entire business makes tremendous progress.
This is especially critical in a public entity like Road Infrastructures, which provides the essential public good of roads for the common welfare. With the right people and good governance, the institution can have a significant societal impact, broadly contributing to the country’s economic and social goals. Ultimately, this builds vital trust between citizens and their government institutions.
CPA Pauline N. Kahwai works at the State Department of Roads, Kenya Rural Roads Authority. She is an accountant/finance and investment expert who prepares accurate financial statements in compliance with IFRS, IPSAS, and local regulations, conducting financial reporting and analysis. In Budgeting and forecasting, she develops annual budgets, serves as a variance analyst, and performs financial forecasting, tax preparation and compliance.
.
