Careers: top of the pile
What do company boards believe makes an outstanding FD?
What do company boards believe makes an outstanding FD?
ANYONE ASPIRING to be an FD or wanting recognition as ‘outstanding’ in their current FD role, should focus on their people and communication skills and gain broad commercial experience early on in their career. These are the clear attributes that transform an average finance person into an outstanding finance director.
One thing is certain. Today’s top FDs are the opposite of the time honoured stereotype of the timid accountant, dreaming of becoming a lion tamer in the famous Monty Python sketch.
They are a much more rounded, commercial business leader than their counterparts of ten or 20 years ago. They are forward looking and making tough, brave decisions.
Research carried out this summer, in association with Grant Thornton, with nearly 350 directors – chairmen, chief executives and executive directors – asked board members to nominate outstanding finance directors they had worked with and to identify what made them outstanding.
Communication and relationship skills came through time and again. An FD has to be liked and trusted in their business so that managers share problems with them, rather than try to hide them or work around the FD.
Matthew Streets, CFO at world-renowned architects Foster + Partners – and a nominated ‘outstanding’ FD – emphasised the point about good communication skills. He says: “You are the expert in numbers but not everyone else is. I realised early on you don’t only do numbers, sometimes you do pictures – graphs, pie charts or whatever – but not just numbers.”
Clearly the most important relationship for an FD is the one with their chief executive. There is no magic formula as to how to make this work, but it must be based on respect and trust.
The research also included interviews with 25 of the nominated outstanding FDs, looking at their career paths to the top and gaining their insights into the role. These FDs recognised the balancing act they have to play between forming a partnership with the CEO and supporting him, but at the same time being the one who is prepared to stand up and challenge when required, often when no-one else will. But all the outstanding FDs were clear that, whatever their differences, they had to present a united front to the outside world and internally.
For a fast route to the top, FDs must gain commercial experience and understand where wealth is created in a business. This can be done by taking on divisional roles, working at headquarters, getting involved in mergers and acquisitions or an investor facing role, working overseas, experiencing adverse conditions and getting close to the customer.
Although technical competence is generally viewed as essential, becoming too much of a technical expert can be detrimental.
Barbara Richmond, group FD at Redrow and another ‘outstanding’ FD believes curiosity and understanding the customer are critical. “You have to have a curious mind – really wanting to understand what’s behind the numbers. You have to make an effort to become commercial. The starting point is inside your business and generally people are very willing to help you. When you’re sat at a board meeting trying to make strategic decisions, you need to understand how the customer ticks.”
What is the best path to the top?
Many of the outstanding FDs were qualified accountants – though there were a few exceptions – and most started their careers in a professional firm. Some had added an MBA, which was seen as giving a broader base of understanding than the essential but narrower accountancy qualification.
Andrew Gossage, COO of Ultimate Products, was very happy working in the profession when his favourite client offered him a job. He said: “I had a choice – go for partner in, say, five years or take a risk and leave. It proved to be a great opportunity. I was made FD and general manager of an organisation that employed 500 people at the age of 27.”
A lot of the FDs talked about learning by watching those around them – spotting what impressive people were doing and
adopting these behaviours. A number also talked about seeking out mentors and asking “first class people” to tell them how they were doing.
To get to the top, time in an international business and working overseas can be important. The outstanding FDs had invariably said yes to projects and promotions overseas. This exposure to global business and different working cultures and mindsets can prove invaluable in landing top jobs later. Today, with international trade being the norm for most businesses, this experience is perhaps more important than ever before.
Going overseas often provides the opportunity to do more variety of work and at a more senior level than could have been achieved in a head office, ‘doing many more things than you normally were allowed – the sorts of things you don’t normally see till you get to the very top’.
Richard Guest, CFO at Stock Spirits Group, discussed some of the chances that he did not take: “I had some great opportunities early in my career which required moving overseas to not-so-attractive places. I shied away, sticking to London. If I’d gone overseas, my experience would have grown far more rapidly and I’d have learnt much more about the world rather than being just UK-centric.”
The final piece of career advice is that FDs have to be brave and make decisions, often tough ones in the current economy. The lion tamer has perhaps arrived.
An FD is expected to put their head above the parapet. “The title is finance director and the word director means something… it isn’t controller and it isn’t risk manager, but director, which means you have to get on and make some decisions,” according to Paul Venables, group FD at Hays.
Richard North, NED of Majid Al Futtaim Properties, points out that the FD’s role is to know and trust that they have assessed the risk and that “the decision that you’re taking is, on balance, a damn good bet as opposed to a risky bet. But it’s always a bet”.
And it is worth remembering that every downturn has opportunities. Many see the current economy as a chance for FDs to shine and find the right investment opportunities.
Perhaps the last word should go to Steve Marshall, chair at Balfour Beatty: “Right now as an FD, you can have a major impact – and if you don’t seize the moment, your board will find somebody else who will.”
John Pearce is executive director of The Directorbank Group