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Inside CFO

Inside CFO (Aug 23rd, 2019)

The Masters of Finance list continues to grow. Recent additions include @daviddoughty, @AkrasiaCapital, and @EmmaMuhleman1.

David Doughty is a corporate governance expert in Bristol, England. He works with company directors to help them and their boards be more effective. 

Akrasia Capital, based in Boulder, Colorado, operates as a fractional CFO. Tweets are focused on startups, entrepreneurs, and capital fundraising.

Emma Muhleman is a CFA and CPA in Boston, Massachusetts. She operates as an L/S equity analyst and global macro strategiest with an algorithmic investment management company. She's also an avowed Austrian economics advocate.

As always, your feedback welcome. Hit reply and let me know what you'd like to see in future issues of Inside CFO.

-- Allen

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1. The NAACP appointed Arlis Whalum as its new chief financial officer. Whalum, a CPA, will overall all accounting and finance functions at the civil rights organizations. To assume the position, she migrates from Professional Convention Management Association and holds a Doctorate and Master's Degree from the Graduate Theological Foundation. Her undergraduate degree is from Roosevelt University. The NAACP posted the open position over two months ago. The hiring process was managed by Nonprofit HR. The organization's headquarters is in Baltimore. NAACP hired Derrick Johnson as CEO two years ago afer dismissing Cornell Brooks. -- NAACP

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2. Eric Posner, professor at the University of Chicago Law School, says Milton Friedman was wrong on the shareholder doctrine. Posner was responding to this week's big news that almost 200 CEOs affiliated with the Business Roundtable signed a "statement of corporate purpose" affirming that corporations has a responsibility to more than just shareholders. John G. McLean Professor of Business Administration at Harvard Business School Lynn S. Paine says the real significance of the statement is "whether--and how--" it is put into practice. She points out that the statement makes no mention of changes in corporate governance or management practices. This public discussion, at heart, is about defining what it is corporations are. Millennials, the largest generation in the workforce, want to work for companies that have a sense of social responsibility. Friedman declared his doctrine at a time when Baby Boomers were the most powerful and largest generation in the workforce, Republican Richard Nixon was president, and it was common to encourage corporations to use their power to influence public policy. -- THE ATLANTIC

Do you believe corporations should look beyond the shareholder and be more socially responsibilty? Hit reply and let me know.

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3. FOLLOW FRIDAY - @PremSikka

Prem Sikka is emeritus professor of accounting at the University of Essex and professor of accounting at the Unversity of Sheffield. Few people tweet consistently, reverently, and insightfully about corporate finance than Sikka. From a recent tweet (actually, a retweet):

Nothing excites the Tory right like the notion of a 'free market'. But they're fans of the state when it's convenient, writes @premnsikka

If you really want something interesting, check out his Media stream on Twitter. It's chock full of great videos of great discussions featuring either Sikka or other economic and corporate finance experts. 

He tweets a lot about public policy, especially in the UK, but his insights are useful for businesses of all sizes. Whether he's challenging the auditing failures of the international firms KPMG, Ernst & Young, and PwC or addressing the elderly population living in poverty, he provides food for thought.

Beware: While insightful in many ways, Sikka is a hard leaner to the left.

Where to find Sikka:

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4. Seventy percent of chief financial officers see a recession by the end of 2020. Almost 50 percent think the downturn will occur within the year. These numbers come from the Duke University survey CFO Global Business Outlook. John Graham, D. Richard Mead Jr. family professor of finance at Fuqua School of Business, says recessions are cyclical in any economy and the U.S. is due one. He also predicts that a recession will cause workers to enroll in graduate programs because "when students cannot find work they will return to school." Factors that could lead to a recession, according to Graham, include a shift toward high technology; slow downs in other national economies such as China, Argentina, and Germany; and uncertainty created by President Trump's leadership style. -- DUKE CHRONICLE

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5. In 2018, 80 percent of venture capital was invested in four states while nine states saw none of the funding. Clearbanc, a growth capital VC firm, has funded companies in 43 states in 2019 alone. Using data science, it's funded eight times more female-founded companies than traditional VC firms. Co-founder and President Michele Romanow says venture capital isn't for everyone, especially brands looking to acquire new customers for a product with the right market fit. This interview with Romanow provides some interesting insight into the struggles of looking for capital. -- WWD

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6. Numbrs Personal Finance, a Switzerland-based fintech company, has achieved unicorn status. If you've never heard of Numbrs, it's because the company was founded in 2012, but its mobile banking app was officially launched in 2014, in Germany. While there has been an uptick in digital-only banking in recent years, the Europeans are far ahead of U.S. bank customers in adopting digital. The largest and most popular companies in digital banking--N26, Monzo, and Revolut--are all headquartered in a European country and are just now looking at entering the U.S. market. Numbrs achieved unicorn status by raising $40 million in a recent funding round, but its focus is on private investors. The company has more 50 families and individuals invested. The company has yet to turn a profit. -- FINANCE FEEDS

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7. Startups need corporate capital because innovation is slow and mandatory while competition is stiff, says Antoine Baschiera, CEO and Co-Founder of Early Metrics. Companies are moving from an internal innovation model to an open innovation mindset, he says. That process is faster than the old model. The speed at which companies can innovate and roll out new products to meet consumer needs doesn't have as much to do with talent as it does the size of the company and the fact that consumers' demands change so quickly. Another benefit to seeking corporate funding is to leverage the credibility of the larger organization to reach new market segments. Besides access to capital, a third reason startups seek out corporate venture capital is to partner on complex co-developments. -- ONEPIECE WORK / YOUTUBE  

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Inside CFO is written and curated by award-winning journalist and former newspaper editor Allen Taylor. Recognized by the Dallas Bar Association three times for excellence in legal reporting, Allen has since gone on to author, edit, or ghostwrite several white papers, books and e-books, and over 10,000 blog posts for clients ranging from small business owners to global management companies and corporate executives. Learn more about him on LinkedIn.

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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