Deep Dive:

  • About six months after Archer Daniels Midland (ADM) disclosed a plan to fix its accounting practices involving interdepartmental reports, the grain trading giant's new CFO, Monish Patolawala, said Tuesday that "material weaknesses" would be a top priority and that he planned to help address the "root causes." The remarks came from his presentation at a Barclays conference.
  • "We have to continue to drive this journey of strong governance, controls, and compliance, and that's critical," Patolawala said during a session with CEO Juan Luciano.
  • Patolawala, who previously served as the finance chief at industrial products maker 3M, joined Chicago-based ADM last month. He steps in during a critical time for the company's financial leadership. He succeeds Vikram Luthar, who was abruptly placed on leave after ADM announced an internal accounting investigation in January and announced his resignation in April.

Deep Insight:

Patolawala, 54, is a seasoned finance leader who served as CFO at 3M for about four years. He also has experience dealing with Securities and Exchange Commission (SEC) investigations: last year, 3M agreed to pay more than $6.5 million to settle charges of violating books and records and internal control provisions of the Foreign Corrupt Practices Act, CFO Dive previously reported.

He takes over the company's finance reins amid broader scrutiny of ADM's accounting practices. In March, the company said it received a voluntary document request from the Department of Justice following the disclosure of an internal accounting investigation on January 21. As of March, the company said it continued to cooperate with government investigations by the SEC and the DOJ. The company did not immediately respond to a request for comment.

Beyond addressing accounting matters, Patolawala said his early priorities in the new role also include focusing on operational rigor and prudent capital allocation.

On operational rigor, he said he is a strong believer in the power of data. "Visualizing data and then applying lean principles helps in good root cause analysis," he said. "Solving problems by finding the true root cause, and then bringing teams together to develop solutions that create lasting value."

As for his view on capital allocation, he said successful companies invest "wisely," pace themselves, and are prepared to adjust plans when prospects deteriorate. Successful teams "look at the risks, then decide the path forward, and again apply lean thinking, starting to say, 'I might fail, but I will fail fast, or pivot if necessary.' Throughout my career, I have followed this principle," he said.