Business owners consider being financially independent as one of their primary objectives right from the point of establishing a business till taking it to the paths of success. They ought to clearly understand that their management decisions on diverse aspects such as profits, cash flow, financial conditions and others of the company play a major role both in the short and long run. In fact, every single aspect of a business has a great impact on its financial performance and must be evaluated and controlled by the business owner. Financial management is most important when business owners witness losses and negative cash flows. This means that they must create financial projections of these negative cash flows in order to determine how much cash is required to fund the business till the point of becoming profitable.

Financial management is the process of finding the proper source of funds at the lowest cost, controlling the company’s cost of capital, and not letting the balance sheet become too highly leveraged with debt. In a nutshell, financial management helps organizations in financial planning, planning and acquisition of funds, effectively utilizing and allocating acquired funds, making critical financial decisions, enhancing the profitability, increasing overall value of the firms, providing economic stability, and encouraging employees to save money, thereby helping them in personal financial planning.

Especially post the Covid-19 crisis, there has been lower growth in businesses, worsened inequality, distorted markets, and most importantly rising financial risks. The COVID-19 pandemic has caused an unprecedented human and health crisis. The measures necessary to contain the virus have triggered an economic downturn. At this point, there is great uncertainty about its severity and length. The latest Global Financial Stability Report shows that the financial system has already felt a dramatic impact, and a further intensification of the crisis could affect global financial stability.

Since the pandemic’s outbreak, prices of risk assets have decreased substantially. At the worst point of the recent selloff, risk assets suffered half or more of the declines that happened in the years 2008 and 2009. For example, many equity markets in economies large and small have endured declines of 30 percent or more at the trough. Credit spreads have jumped, especially for lower-rated firms. Signs of stress have also emerged in major short-term funding markets, including the global market for U.S. dollars.

In fact, the global pandemic has been the toughest leadership test for leaders and executives in the top level of management. The micro habits of CEOs such as daily routines and ways of working can help leaders stay ahead and abreast of the market during the pandemic. CEOs have had to cope with extraordinary demands through sheer determination and resilience, and thus emerge stronger from the crisis.

CEOs ought to consider a flexible compensation system, get the leadership pay cut to adjust low-wage employees, freeze hiring plans, keep a check on spending, and other measures

The most imperative characteristics observed among these CEOs were bounded optimism and deliberate calmness while they were striving to manage the overall financial aspects of their businesses. They not only have to demonstrate empathy but also stay highly engaged in their business endeavours. Besides, they ought to etch a positive difference in people’s lives with their leadership skills while setting both short and long-term goals for their businesses.

Despite the global pandemic posing a stream of challenges, the CEOs and their team of experts ensure to stay energized and proactive to overcome and soar ahead with success. In fact, there has been a close bonding between leaders and their teams during the pandemic as they strive together to propel their business ahead of these difficult times.

CEOs have to be available every single minute to address any problem or concern of all their stakeholders. This way, they can emerge from it strengthened, compassionate, confident, forward looking, and successful both on personal and professional fronts. They will be the ones who know themselves the best and can respond to the many challenges.

Towards achieving the best financial management in their organizations, CEOs ought to consider a flexible compensation system, get the leadership pay cut to adjust low-wage employees, freeze hiring plans, keep a check on spending, and other measures. They must tap on the monthly variable component to adjust wages depending on business performance. Employers should be clear about returning the amount cut during the recession through future pay rises or when the business recovers. Any wage adjustments may hit low-wage employees harder. Special consideration needs to be given for employees especially if they’re frontline workers. One way to soften the blow is to use a ‘graduated’ approach.

Since the future is agile, roles will get redundant, new roles will emerge, and hence employees need to make a transition into different roles as the need arises. Organizations, on the other hand, need to plan for better workforce utilization.

The leaders also have to review and target cutting on non-essential discretionary spending which includes any spending that can be safely curtailed or eliminated without damaging the bottom line, team morale, or professional relationships with customers or suppliers.

Most importantly, CEOs have to frequently create symbolic acts, mobilize their teams, stay abreast of the market and its changes, tune in to their stakeholders, and keep an eye on the end game to not just survive the current global pandemic, but any critical situation in the future too.