Good morning. AI was a hot topic in Texas on Wednesday night.
The Fortune CFO Collaborative dinner, held in collaboration with our partner Workday and sponsor Deloitte, took place at March restaurant in Houston, bringing together a group of prominent CFOs from the city and beyond.
Guest speaker Niccolo de Masi, chairman of the Futurum Group, said that generative AI, which he refers to as an extension of machine learning, will increase employment when it comes to finance functions.
“The predictions I will give this room: It’s going to be a net job creator for the function, it’s going to increase the power of this function,” he said. “It’s going to increase the importance and criticality of everyone who’s in the profession being kind of the systems integrator of all things, from data to supply chain to compliance.”
“I’ve been on the correct side of history on this one for the past decade,” de Masi added. He recalled back in 2015 sitting in Stanford with a group of professors who were “really demoralized about how a million truckers could be out of work within two or three years.”
“I doubt it,” he remembers telling them. “AI will grow the economy, which means you’ll have more customers and more services. And today, truckers get paid more and have better benefits than ever.”
A seasoned technology CEO leading multiple companies, de Masi’s roles have included CEO of dMY Technologies and former chairman and CEO of Glu Mobile. He said the same way that Excel has been embraced to boost productivity, so, too, will generative AI.
“It’s a vast productivity improver, but not a panacea,” de Masi said. “And my prediction is that by the end of this year, people will include this in part of their vending conversations.”
But CFOs, in particular, have a vital role at “the center of data information integrity,” he said. That includes everything from hiring practices to supply chains to forecasting. “The integrity of what you construct will become the mark, I think, of the best CFOs.”
A ‘grand error’ in cybersecurity
Regarding data, Fortune Senior Editor-at-Large Geoff Colvin brought up the issue of cybersecurity, referring to the recent incident where a finance worker at a multinational firm remitted a total of $200 million Hong Kong dollars, about $25.6 million, to fraudsters who used deepfake technology.
de Masi told the audience of CFOs that about eight years ago, when he was running Glu Mobile, a developer and publisher of mobile games, cybercriminals hacked the firm and held it hostage.
“We paid ransom,” he said. “It was with the higher-integrity cybercriminals that release the data after you pay them.” Glu Mobile also suffered a phishing incident.
“A bad actor sent emails into my organization, and the head of payroll got one that appeared to be sent from me, and it said: ‘I’m just doing some research from the comp committee, please upload all of the W-2s for our U.S. employees to this Dropbox folder.’”
In general, companies may bring in cybersecurity consultants or do phishing training, but it dawned on de Masi that one of the “grand errors” when it comes to cybersecurity governance is not ensuring everyone in the finance organization has the proper training.
“What matters is the five to 10 people in your function having a hundred to a thousand times more training than everybody else,” de Masi said. “They’re the ones who could actually upload the W-2s.”
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Today’s edition was curated by María Soledad Davila Calero
Some notable moves this week:
Daniella Turenshine, CFO at Figs (NYSE: FIGS), a health care apparel and lifestyle brand, has stepped down to assume a role as a chief financial officer at another company. Turenshine will remain in her current role through April 12, and plans to serve as an advisor for a transition period. Figs has begun a search for a new CFO. Kevin Fosty, VP and corporate controller of the company since April 2021, will assume the role of interim CFO.
Jonathan Lock was placed on leave as CFO of chemical manufacturer Chemoros (NYSE: CC), along with the CEO Mark Newman, and principal accounting officer Camela Wisel. The decision of the board came amidst concern about working capital management, Reuters reported. The board announced it would conduct an investigation and named Matt Abbott as interim CEO.
Mika Ware was promoted to SVP and CFO at Brinker International Inc. (NYSE: EAT), a casual dining restaurant company, effective June 27. Joe Taylor, current EVP and CFO, plans to retire at the end of the company's fiscal year in June 2024 after almost 25 years at the company. Ware is currently VP of finance, investor relations, and restaurant development.
Charlotte Hanneman was named as CFO at Philips (NYSE: PHG), a health care tech company. Hanneman will assume the role officially on Oct. 1 but will join Philips' executive committee on June 1, for a transitional period with outgoing CFO Abhijit Bhattacharya, who is set to retire by the end of September. Hanneman has 20 years of experience in the medtech industry, previously working as controller and head of financial planning and analysis at Stryker.
Juan Joachin was named CFO at National DCP, a supply chain management company serving Dunkin' franchisees. The previous CFO, Stephen Down, was promoted to CEO on Dec. 20, 2023. Joachin has worked for years at the intersection of food and finance, most recently as senior vice president of finance at Inspire Brands. Before joining Inspire, Joachin was the SVP of finance operations at Domino's Pizza.
James Miln was named CFO at Xometry, Inc. (Nasdaq: XMTR), a global AI-powered marketplace, effective March 1. Miln succeeds retiring CFO Jim Rallo, who will remain as an advisor to Xometry through April. Miln joins Xometry from Yelp, where he was SVP of finance and investor relations.
Ajay Gopal was named CFO at the luxury reseller TheRealReal (Nasdaq: REAL), effective March 18. Gopal currently serves as CFO of Outside Interactive, and previously served as CFO at Good Eggs, Helix, and StubHub. He has also held senior leadership positions in finance at eBay and GE Healthcare.
Dean Butler was named SVP and CFO at Silicon Labs (Nasdaq: SLAB), a wireless technology provider, effective May 15. Butler will succeed Mark Mauldin, currently serving as interim CFO. Butler joins Silicon Labs from Synaptics Incorporated, where he has served as SVP and CFO since October 2019. He previously held financial leadership positions at Marvell Technology, Inc., and at Broadcom, Inc.
Big deal
Deloitte has released its 2024 MarginPLUS study, "Rethinking business margin improvement strategies." The survey gauged the outlook of business leaders on organizational growth for the coming year, the positive and negative factors that had the biggest influence on their organization’s pursuit of margin improvement, and intended strategies and tactics for the year ahead.
Almost all (99%) of the executives surveyed are planning to implement some form of margin improvement program. Eighty-two percent said they missed their cost-reduction targets, which is up from 72% a year ago. This is the highest failure rate Deloitte has recorded since starting this series in 2008, according to the report.
The most cited challenge to cutting costs was tech infrastructure. Half of respondents named challenges with tech infrastructure as the chief internal barrier to cost control. To drive margins, companies are focused on AI and data strategies (52%), organizational restructuring (49%), and process reengineering and automation (45%). The findings are based on a study of more than 300 business leaders.
Going deeper
Here are a few Fortune weekend reads:
"From KKR to Thoma Bravo: how 10 top private equity firms are performing as sky-high tech prices from 2021 fall back to earth" by Luisa Beltran
"Wells Fargo study highlights increasing anxiety among U.S. earners: ‘We’re not getting as much utility out of our money as we used to’" by Alicia Adamczyk
"‘We have consistently flirted with death’: Elon Musk wanted the Boring Co. to build a tunnel system below Las Vegas. Former employees say they feared for their lives while working there" by Jessica Mathews
"Employees need more. This company wants to serve as your ‘Chief Well-Being Officer’" by Alexa Mikhail
Overheard
“Baby boomers are staying in their homes longer. They’re wealthier. They’re healthier. They’re able to stay in place longer than generations past.”
—Economist Mark Fleming warned Fortune that the expectation of a “silver wave” of baby boomers selling their homes to downsize may be more gradual because they are holding on to their homes. Other reports also point to mortgage rates and the contentment with staying in place as reasons why boomers may not want to downsize just yet.
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