To create sustainable, long-term shareholder value, it is important to explicitly establish an appropriate shareholder value target. The key to reaching this target and achieving a competitive advantage is the alignment of business, financial, and investor strategies. Therefore, companies must address the following important challenges:
- Pressure-test financial policies to ensure that we have the right capital-structure, dividend, and buy-back policies. Setting up to weather financial storms
- İdentifying shareholders’ investment approaches
- Aligning strategies to target the right investors those that will support my medium to long-term business and financial strategy
- Integrating plans to create enough shareholder value to reach targets. Identify moves to close the gap to target
Eurosis Consulting works with clients to optimize medium to long-term shareholder return at both the corporate and business-unit levels. We distill investor insight from structured interviews with a significant portion of the client’s shareholder base. Through proprietary regression techniques, we identify and assess the relevance of the company-specific valuation drivers and benchmark the results against those of peers.
CFOs play a crucial role in aligning stakeholders so everyone sees value creation through the same lens. As the CFO is also at the helm of value-creation efforts companywide, he or she can use the finance function to test new ideas and set best practices. We support our clients in the following activities:
- Performance measurement and management: We apply rigorous analytical tools and methodologies to assess business value and performance.
- Lean finance: We use lean principles and well-tested improvement levers, such as consolidation and shared services, demand management, and organizational streamlining, to optimize the practices and performance of the finance function.
- Treasury optimization:We draw upon benchmarks and extensive experience to streamline treasury activities and transform the treasurer into a strategic partner who drives value.
- Finance talent management: We help shape the talent strategy, build talent systems, and develop leaders to create a world-class finance function.
- CFO: We help define the role, responsibilities, and agenda of the CFO.
On the basis of this knowledge, we help our clients pressure-test and reshape their financial policies around the use of cash, dividends, and share buybacks. We also challenge and refine business plans with clients to achieve the targeted shareholder return, and we help develop alternatives to the base plan that deliver stronger shareholder returns built on different combinations of business, financial, and investor strategies. In some cases, our holistic approach has yielded a shareholder return improvement of 25 percent.