The benefits and drawbacks of working in finance for a publicly traded/listed company in India

Ok I admit it. The title is a blatant effort to win some SEO brownie points. But thats par of the course these days, and given the uniqueness of this topic (I hardly found any relevant links), I thought I would write on this subject, from personal experience, and also from interactions with other finance professionals. Firstly, some background on what distinguishes a public listed company from other companies?

• Minority shareholders: These are often the very reason for a listing, and to ensure liquidity in trading, Indian stock exchanges mandate a minimum 25% free float i.e promoter shareholding capped at 75%. Not coincidently. key corporate actions in India require a special majority i.e 76% of shareholders to approve matters, but since this % is calculated on those shareholders present and voting, 75% or a much lower shareholding is often enough in practice. That said, minority shareholders have a veto on certain related party transactions and actions, so one cannot ignore them. 
• Periodic reporting: Quarterly reports in addition to annual reports, within the stipulated timeline of 45 days/60 days
• Internal Financial Controls certification: For listed companies, there is a CXO level certification with stringent penal liabilities if proved wrong. Hence, the demand for a robust finance controller who can keep the CXO from jail 
• Voluminous disclosures/ Multiplying non financial reporting Be it CSR, ESG, BRR, IND-AS, IFRS..listed companies are often the first guinea pigs of financial and non financial reporting since they are public interest entities. This can prove a burden to report all this.
• Independent Directors/Audit Committees: For listed companies, there are mandates to have a certain proportion of independent directors, over and above that stipulated by the Companies Act 2013. These additional stakeholders bring new perspectives, but could also challenge management in a manner not to the former's liking

Why do I single out the finance function here? While all functions experience a (hopefully) more stringent control environment, it is the finance and legal functions whose stewardship role increases here.  The difference being clear (hopefully), let us now see why a listed company would be preferable to a finance professional, and why sometimes it may not. Firstly the pros

• Independent Audit Committee (in theory)
• Better controls
• Multiple audits/certifications
• Multiple professional interactions
• Exposure to handling minority interests
• Investor Relations: This is a unique role in public traded companies, since even private equity companies would have more of internal MIS than an extensive IR engagement. Preparing IR decks, financial press releases, stakeholder mapping
• AGM/EGM: This is a JV between Finance and Secretarial functions, however every finance professional should get involved in the preparation for an AGM of a listed company atleast once so that they appreciate the extent of background effort
• Strategic disclosure drafting:Strike a balance between disclosing more to please investors and win awards, versus revealing business model insights.

The cons however could be

• Non value adding work: Be it reviewing an annual report for the nth time before review despite the knowledge that it will likely not be read by even 0.1% of investors, getting backup certifications/attestations for the comfort of independent board members
• Disclosure overdose: Not all reporting is likely to help investors(eg BRR) but is mandated and wastes man-months in its preparation
• Potential Legal Liability: If you are a victim of management override(possible if other functions have 'promoter appointed' people-like a 'Lala company'), you are still presumed to be culpable unless due diligence is proven: 
• Dealing with controlling shareholder-ethics: The controlling shareholder/management is the on
• Hierarchial/Ladder-Big company woes: Listed companies usually tend to be large profitable entities (when initially listed atleast). So the issues of 

Overall, it is for one to map their stage of career, aspirations

The benefits and drawbacks of working in finance for a publicly traded/listed company in India

Ok I admit it. The title is a blatant effort to win some SEO brownie points. But thats par of the course these days, and given the uniqueness of this topic (I hardly found any relevant links), I thought I would write on this subject, from personal experience, and also from interactions with other finance professionals. Firstly, some background on what distinguishes a public listed company from other companies?

• Minority shareholders: These are often the very reason for a listing, and to ensure liquidity in trading, Indian stock exchanges mandate a minimum 25% free float i.e promoter shareholding capped at 75%. Not coincidently. key corporate actions in India require a special majority i.e 76% of shareholders to approve matters, but since this % is calculated on those shareholders present and voting, 75% or a much lower shareholding is often enough in practice. That said, minority shareholders have a veto on certain related party transactions and actions, so one cannot ignore them. 
• Periodic reporting: Quarterly reports in addition to annual reports, within the stipulated timeline of 45 days/60 days
• Internal Financial Controls certification: For listed companies, there is a CXO level certification with stringent penal liabilities if proved wrong. Hence, the demand for a robust finance controller who can keep the CXO from jail 
• Voluminous disclosures/ Multiplying non financial reporting Be it CSR, ESG, BRR, IND-AS, IFRS..listed companies are often the first guinea pigs of financial and non financial reporting since they are public interest entities. This can prove a burden to report all this.
• Independent Directors/Audit Committees: For listed companies, there are mandates to have a certain proportion of independent directors, over and above that stipulated by the Companies Act 2013. These additional stakeholders bring new perspectives, but could also challenge management in a manner not to the former's liking

Why do I single out the finance function here? While all functions experience a (hopefully) more stringent control environment, it is the finance and legal functions whose stewardship role increases here.  The difference being clear (hopefully), let us now see why a listed company would be preferable to a finance professional, and why sometimes it may not. Firstly the pros

• Independent Audit Committee (in theory)
• Better controls
• Multiple audits/certifications
• Multiple professional interactions
• Exposure to handling minority interests
• Investor Relations: This is a unique role in public traded companies, since even private equity companies would have more of internal MIS than an extensive IR engagement. Preparing IR decks, financial press releases, stakeholder mapping
• AGM/EGM: This is a JV between Finance and Secretarial functions, however every finance professional should get involved in the preparation for an AGM of a listed company atleast once so that they appreciate the extent of background effort
• Strategic disclosure drafting:Strike a balance between disclosing more to please investors and win awards, versus revealing business model insights.

The cons however could be

• Non value adding work: Be it reviewing an annual report for the nth time before review despite the knowledge that it will likely not be read by even 0.1% of investors, getting backup certifications/attestations for the comfort of independent board members
• Disclosure overdose: Not all reporting is likely to help investors(eg BRR) but is mandated and wastes man-months in its preparation
• Potential Legal Liability: If you are a victim of management override(possible if other functions have 'promoter appointed' people-like a 'Lala company'), you are still presumed to be culpable unless due diligence is proven: 
• Dealing with controlling shareholder-ethics: The controlling shareholder/management is the on
• Hierarchial/Ladder-Big company woes: Listed companies usually tend to be large profitable entities (when initially listed atleast). So the issues of 

Overall, it is for one to map their stage of career, aspirations

Why accountants should master information systems

When I refer to accountants in this context, it does not refer just to 'financial accountants' but also to 'management accountants' and corporate financial analysts, who handle internal corporate data. Of course, external auditors etc are anyways dutybound to evaluate client information systems to decide the extent of reliance on records/nature of assurance they can give, so I do not include them in this. Before understanding the ISACA study material of the ICAI, I felt that information systems was a geeky subject best left to engineers, but then I realized its real importance later. After all, accounting is an information system by itself, and therefore the IT approach to IS is just one aspect(but very helpful too, though it focusses more on automation and lesser on controls which accountants are expected to design).

1. System framework is quite useful for analyzing organization phenomenon. Skills using data flow diagrams etc are quite helpful while designing, auditing and improving systems.
2. To preserve their identity, autonomy and core competence, organizations are a closed system in many aspects. So are accounting systems-closed when it comes to basic principles, but quite open in the adaptation/interpretation of them.
3. IPOS cycle(Input process storage output) misses out in fact that feedback loops lead to output affecting input/virtuous cycles etc. This is true for accounting as well(which has evolved as per the way various users accounted their transactions).
4. Once we define the system boundary, we are much closer to defining the problem and our focus.
5. Example of buffer is cache memory, inventory, queues etc. This concept helps while scheduling work during peak seasons.
6. Way to decouple databases(lessen need for communication) is having common database standards, which is exactly what is done by many organizations(auto generated invoices between partners sharing same standards).
7. ERP is a more subtle form of putting in best practices, which can improve controls and performance substantially.
8. Post Implementation reviews like in PDCA cycle must to see how to get better next time, especially in the project management scene of IT. Those lessons useful for audit/control.
9. Outsourcing needs among other things, source code escrow, risk/controls and metrics for SLA. These should involve the finance function as well.
10. User signoffs not just CYA(cover your a**), also way to ensure buy in/proper needs built in etc

There can be tomes but this is all for now.