CFOs and CROs have significant potential to influence the value of their firm through three channels.
This chapter motivates the importance of these three levers in managing the value of the company from a CFO and CRO's perspective.
The first objective of this Handbook is to develop a value and performance measurement framework which can be used by managers at all levels to set strategy and steer risk-based, capital-intensive banking and insurance businesses. The valuation framework, illustrated below, splits the value of the firm between its current net asset value (or the market value of its current assets less its liabilities) and its franchise value (reflecting future, profitable new business).
Figure 1.1 is used throughout the Handbook to represent the three value levers available to CFOs and CROs – better information, better insights and better decisions.