As the new chair of The Hundred Group of Finance Directors, Symonds will be the financial mouthpiece of the FTSE100. The Hundred Group is little known, but when it speaks it is listened to ð in the City, in Westminster, and, increasingly, in Brussels and Washington.
‘On the right issues, we do have access, we do have influence,’ he says. And with debate raging on auditor liability, Sarbanes-Oxley, international accounting standards, Higgs and Smith ð the list goes on ð that access and influence is vital if UK plc is to avoid being sidelined as enthusiasm for regulatory change reaches fever pitch.
But Symonds is confident he can help ensure the right regulation for UK plc. ‘If you look at the scope of contacts we’ve got with the Treasury and Inland Revenue, DTI and Accounting Standards Board and the FRC, I think we’re an integral part of the dialogue and that’s ultimately what I want to be judged on ð the quality of those relationships and the input we have into those debates.’
And representing UK plc at this time is no easy job. Yet if you listen to some of Symonds’ peers, he could just be the right man in the right job at the right time.
‘In my view Jon is one of the best FDs of his generation,’ says John Coombe, CFO of GlaxoSmithKline and himself a former chairman of the Hundred Group. ‘He is able to contribute and influence at every level ð financial performance, taxation, government affairs.’ Coombe points to Symonds’ recent elevation to the Accounting Standards Board ð not to mention his day job as CFO of AstraZeneca, a company that already reports using international accounting standards ð as factors that will ensure the interests of UK plc are well represented going forward.
‘His experience of dealing with government will prove invaluable in his role as chairman of the Hundred Group and his influence on the ASB should ensure that commonsense prevails as we head for 2005.’
An hour with Symonds is enough to see evidence of the qualities Coombe describes. He has the twin assets of a razor sharp mind and an ability to keep his feet on the ground.
One minute he is disentangling the complicated business of investment in the pharmaceutical industry, the next he is joking with our photographer that his accountancy training never prepared him for some of the poses he is asked to contort himself in to.
He is keenly aware of his own strengths and weaknesses. ‘I’m not what you call a technical accountant. I’m not somebody who’s going to give you para this and para that of FRS17. But I do feel it’s important that the generators of financial information have a very strong say in the way accounting standards are going.’
After a long career with KPMG ð including a five-year spell sharing an office with then colleague and now HSBC CFO Douglas Flint ð Symonds joined UK pharmaceutical giant Zeneca group as CFO in 1997. After the merger with Swedish rival Astra AB, he became CFO of the new company, AstraZeneca, in 1999.
But he packs a lot in around what he terms his day job. As well as his roles at the Hundred Group and the ASB, he is also the joint chairman of the Business Tax Forum and is a non-executive director of QinetiQ, a former Ministry of Defence research agency.
Accountancy Age has written at length about the changing role of the finance director ð so much so that it has become almost a cliche to say that the FD’s role is now more strategic than numbers-driven. And in many senses Symonds appears to embody that shift.
He defines his role as working on behalf of his chief executive Sir Tom McKillop to deliver AstraZeneca’s strategy in financial terms, deliver the performance that underpins that strategy and ensure that through the company’s financial reporting, it is communicated effectively to stakeholders. ‘Our number one priority is to deliver more value for AstraZeneca,’ he says.
So far, so modern ð but Symonds fears post-Enron regulation is reversing the trend with FDs forced to retreat to their spreadsheets. ‘I think the pendulum has swung back,’ he says. ‘I spend a lot of time on risk management. I spend a fair bit of time communicating financial performance and analysis.’
For a company of its size ð its sales last year were $17.8bn (£10.5bn), while operating profit was $4.4bn ð AstraZeneca is, in Symonds’ words, ‘a very lean ship’. It has a 100-person head office, with the numbers working in treasury, tax and investor relations ð all based in Manchester ð barely scraping into double figures.
So perhaps it is not surprising that Symonds’ biggest headache is that there aren’t enough hours in the day. ‘I want to release more of the finance function’s time towards delivering value. And I keep getting pulled back into the routine; I recognise high-quality financial reporting is important, but I worry when it takes up too much of the time.’
Nevertheless, he is a fan of quarterly reporting and has little sympathy for those who see it as imposing short-termism on companies. ‘We report quarterly and I don’t object to it at all,’ he says. ‘There’s a good discipline that comes from it internally and I think it provides a regular platform to communicate changes in the business to our shareholders and to our investors.
‘What I don’t subscribe to is setting quarterly targets, we never say, you know, earnings per share in the next quarter’s going to go up by 1%. We have huge volatility. We talk about how we will deliver this over the year, but I refuse to get drawn into quarterly targets because I can’t manage the business on a three-month basis and I refuse to put that distortion into it.’
Yet, he does have wider concerns about the quality of financial reporting today. ‘I think it’s unfortunate that you put a lot of effort into the 100 pages of annual reports, then you have to present your numbers to the outside world in a completely different way,’ he says.
He points to IAS39 (on derivatives) and performance reporting as examples of where things have slid. ‘I believe it’s a failure of accounting if you have to communicate to your stakeholders in a different way from the way you present your numbers,’ he says.
But Symonds would rather concentrate on the rewarding aspects of the job, not the irritations, including ‘the right performance measures to be able to demonstrate that the company is delivering to its full potential’.
‘I want the finance function to be able to keep delivering sets of performance measures that enable us to see where we are. We’re way beyond the basic numerical performance measures here. We’re into some quite sophisticated measures around efficiency, around productivity, around joining science and value and that sort of thing.
‘And it’s a constant challenge because every time you come up with a new set of measures, the finance function likes to sort of hardwire them. But I like to chuck them away after three months or 12 months because the world has moved on. It’s getting that balance between flexibility and quality.’
The industry in which AstraZeneca operates requires some very individual planning decisions when it comes to investment in research and development. ‘We budget on the basis that quite a lot of it will fail,’ says Symonds. ‘All our systems both clinical, regulatory and financial are geared towards killing projects as quickly as possible, which is a sort of bizarre concept, but if you let it get too far, you’re spending hundreds of millions of dollars which gives you no return.’
But he is quick to head off any implication that this means his accountants act as brakes, not enablers. The finance team comes into its own, he says, once the scientists have tested the concepts behind a potential new product, the commercial team has deemed it commercially viable and it has been proved safe in clinical trials.
Symonds takes a relaxed view on regulation ð he embraces the spirit of concepts that he believes are right, integrating them into the heart of the business.
He is no fan of box ticking ð whatever the driving force behind it. ‘We’re always looking at a value-enhancing mechanism for doing it. With Sarbanes-Oxley section 404 we’re approaching it in the same way. You have to do this. You don’t necessarily like it, but we accept we have to do it. So how can we now do it in a way that’s compatible with the organisation?’
And it is this threat of a return to box ticking ð both inside and outside companies ð that makes him worry about the state of the audit. ‘We all need a strong audit profession,’ he says. ‘And it does worry me that actually graduates, good graduates, will start to look at the profession as not a good place to be.
‘I actually worry about it more in the US, because I believe that the UK auditing profession has always been of a higher quality here, partly because the rulebook approach in the US has actually diminished auditors’ ability to make fine judgements based on accounting practice and the commercial situation.’Given his new role, auditors should expect to hear from Symonds soon.
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