Partner In Strategy: From ‘Chief Of Staff’ To CFO

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After a challenging 2020, FleetCor is back to focusing on growth, and finance chief Charles Freund is drawing on decades of experience to help it succeed.

A 20-year veteran of FleetCor Technologies Inc., Charles Freund became CFO of the Atlanta-based global provider of business payment solutions. Freund has held many roles at FleetCor, running lines of business across geographies, leading strategy development, and also serving as the CEO’s quasi chief of staff. We asked him how his varied experience now shapes his new position as C FO.

How is the CEO’s chief-of-staff role different than a COO role?

My role as chief of staff was more of a consigliere, someone who knows a lot about the company and who can give advice on most aspects of the business. I was involved in all manner of projects—budgeting, forecasts, sales, portfolio management, certain acquisitions, organizational strategy—you name it, mostly as a trusted internal advisor. Prior to those positions, I ran our developing markets operations in Brazil, Mexico, New Zealand and Australia, after working closely with the CEO and the then-CFO to complete an IPO in 2010. I also served as head of the strategy team advising on big picture strategy, for project managers within the company to carry out really important initiatives of the CEO. Then I became CFO.

How do these varied experiences help you in your new role?

It was a nontraditional way to becoming CFO, but with my history in the company—working through various roles in all of the different business lines, and all of the international businesses, learning the nuances of all of the different cultures when working abroad—I have more in-depth knowledge than others in the company about how processes work, our revenue models, how operators think about a business, even identifying additional opportunities and budgets that go with them. I can opine on the acquisitions, I’ve been involved in capital raising for private equity, as well as within the IPO.

So I’ve had a lot of experience around the CFO role without having the technical background and expertise – which is why I now rely on our chief accounting officer, corporate treasurer, corporate controller, the head of investor relations, general counsel, human resource officer and the head of global tax reporting. All of these people have decades of experience in their various areas of expertise, so I have a super strong team I rely upon, while I provide consulting on the company’s history and issues that are going on in the business lines.

How are you helping to shape FleetCor’s strategy in the year ahead?

We’re coming into 2021 after a rather challenging year. In the second quarter, Covid caused the company to pivot very dramatically and focus more on liquidity, credit management and sustainability, which distracted us, but by the fourth quarter we began focusing more on growth again.

When managing credit risk, we did a lot of workouts, but we also issued some credit, albeit with tightened credit limits and payment terms. We’re not a bank, so our model is different —we don’t extend terms with monthly 30-days-to-pay cycles, but rather weekly cycles, and in some cases, daily cycles. So our balance sheet and exposure to long-term credit is different than what a bank might face.

Nonetheless, we did have several billion dollars of credit extended, and we needed to make sure we could collect. In the vast majority of cases, we were able to, but we had some large clients in bankruptcy—however, they were one-off scenarios as opposed to a systemic issue. But out of an abundance of caution, we did take a lot of extraordinary measures to tighten up our processes. We also tightened up underwriting criteria, which basically meant less sales.

We’ve now switched gears, as we have a better understanding of the pandemic’s impact on our client base. Certain segments, industries and geographies have been very affected, whereas others less so, which allows us to reorient our sales targeting going forward.

We’re now ramping back up our advertising on Google and social media sites, and we’re hiring in places where it makes sense. We’re also investing more in our corporate payments segment, where we provide accounts payable outsourcing, as demand for this has actually grown during the pandemic. We’re also investing more in contactless payments. In Brazil our business uses RFID tags on vehicle windshields to pay tolls and we are investing in ways where these payment tags can be used to pay for other items while in your car, including fuel, parking or even fast food.

Given my background as an operator, thinking through new product development and strategy thinking through market segmentation and how to approach different areas markets with different offerings, my experience with M&A, I can basically sit down with the CEO and provide a perspective on whether to proceed on certain initiatives, and how to proceed. And now as CFO, I can discuss an added layer of financial implications if we proceed on initiatives, as well as how to finance them and how investors would react to them.

In some respects, the continuing elements of my past roles is now helping to rationalize back-office support for business strategy. I’m also thinking more about acquisition integration – how we control processes, people, and in some cases, the technology. As CFO, I’m now helping to bridge business strategy initiatives with back-office support.

I’m thinking of new ideas and approaches and how to use my varied experiences to be proactive in my new role to drive value for the company.

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