Second in command
Characters in the Austin Powers movies have their Mini-Mes, and these days every plc group finance director seems to have one, too.
The substantial increase in scope of the group FD role over the past few
years may be welcome, but it has also brought with it added pressure, and
something has had to give.
When finance was purely a policing procedure in a business, the internal
responsibility for statutory reporting and the budgeting process, combined with
the external responsibility to the City, was largely achievable in a five-day
week.
But governance and regulatory requirements have increased, and as businesses
now look more towards the FD for commercial support, the role has grown to
almost unmanageable proportions.
Consequently, the role of the group financial controller (to give it its
classic title) or deputy finance director (as it really appears) has had to
evolve to pick up the inevitable overload. While the group FD now focuses
greater time and energy on the external side of the role – governance, City
reporting, regulation – many of the other areas of core finance now report
through to Number Two.
In many instances audit, tax, treasury, even investor relations and corporate
communications, now report through to this role, as do divisional FDs. The
number two can become the person to whom the businesses turn to for commercial
support and advice, and the role can become the de facto ‘internal FD’.
There are two positives for those already in the role, or aspiring to it. It
makes the job much more varied and interesting, and gives the chance to gain
exposure in the City and with analysts. It also gives a much greater chance of
stepping up into the group FD role when it becomes vacant, as evidenced by Ian
Griffiths at EMAP, Kevin O’Byrne at Dixons, among others.
It is also one of the first places headhunters look when asked to find a new
plc finance director. Shakespeare once said: ‘He also serves who only stands and
waits.’ In reality, the Number Two doesn’t have time to stand, and the good ones
don’t have that long to wait.
Mark Freebairn is a partner and head of the CFO Practice at headhunters
Odgers Ray & Berndtson