PracticeAccounting FirmsQualifications still top of the class for FDs

Qualifications still top of the class for FDs

Survey by FD magazine reveals up to one fifth of companies do not have an accountancy qualified financial director

As many as one-fifth of FTSE 100 companies do not have an accountancy
qualified finance director, a study by Accountancy Age’s sister
publication
Financial
Director
has shown.

Of the top 100 companies in the country, two did not have a finance director,
with 18 not holding an accountancy qualification – including companies such as
BP, Prudential, Royal Bank of Scotland and AstraZeneca.

Of the 18 FD’s without an accountancy certification, 10 have an MBA. The
spectrum of companies is varied, from brand giant Unilever, to travel operator
Thomas Cook, and tobacco company British American Tobacco.

Other statistics in the latest study revealed that the CIMA is losing ground
among the upper echelons of the FTSE 100. The first study looking at
qualifications was compiled in 1998 when 15 of FDs among the UK’s biggest 100
companies were CIMA qualified. The latest figures show that just eight now hold
CIMA membership.

The ICAEW showed an increase in FTSE 100 FDs from 51 to 55 with the CIPFA not
appearing at all this time round compared with two finance chiefs holding the
qualification in 1998.

The biggest drop in institute numbers comes from the Association of Corporate
Treasures who saw their numbers fall from 13 to just seven.

The plunge is due to a change in the admittance criteria for membership to
the Association of Corporate Treasurers. Membership could once have been won by
gaining enough professional experience. However, the ACT now requires
prospective members to pass an examination before they are admitted.

The South African Institute of Chartered Accountants saw five of the FTSE 100
finance directors hold their qualification, level with the ACCA and one less
than ICAS.

Unilever and BP were the only two companies to continue their track record of
non-accountancy qualified FDs. Hans Eggerstedt held the top spot in 1998 at
Unilver, with Jim Lawrence, an MBA, now in charge of finance at the brands
company. John Buchanan was FD in 1998 at BP, with Dr Byron Grote PhD now heading
up the petrol giant.

Broader skills

However experts believe that some industries do not need an accountancy
qualified FD to head up the finance function, even in FTSE 100 companies.

‘Certain businesses can recruit FDs with various skill-sets, with finance not
such a dominant skill – such as mining and financial services,’ says Mark
Freebairn, a senior finance recruiter at Odgers Ray & Berndtson.

‘The skill set for FDs in those sectors is broader and focuses more on the
need for social, political and economic skills,’ he adds.

The report supports Freebairn’s comments as mining and financial services
feature most strongly for non-accountancy qualified FDs; including Aviva and
Petrofac.

Suzzane Wood, managing partner at head-hunter Heidrick & Struggles, says:
‘Companies also want the finance director to create value for shareholders.

‘You could be the best technical person, but if you can’t drive the business
forward, you are restricted in your value.’

She believes qualifications can be cyclical. ‘Post-Enron, we saw a pendulum
swing away from [FDs with a] lack of accountancy qualification. There was more
scrutiny on the FD and whether they could keep control of the business. Now it’s
as if the pendulum is swinging back again.’

Related Articles

BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

6d Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

1w Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

1w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

2w Emma Smith, Managing Editor
RSM announces two partner promotions

Accounting Firms RSM announces two partner promotions

3w Emma Smith, Managing Editor
Backsourcing: The latest accountancy trend?

Accounting Firms Backsourcing: The latest accountancy trend?

1m Pillsbury Winthrop Shaw Pittman