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The Financial Director interview - Making crime pay

Fighting fraud in the copper mines of Papua New Guinea, rescuing tribal staff from murdering one another on the job, kissing frogs ... It's enough to make Harrison Ford break into a sweat! But today's Trevor Dighton - a little older and a lot wiser - has given up his bullwhip and is crime-busting as Securicor group finance director from an executive office in a leafy Surrey suburb - and he's certainly not complaining.

08 Dec 2003

By Tom Berry

Trevor Dighton, group FD at Securicor, isn't that interested in accounting standards or minutiae. In fact, it is remarkable that he became an accountant at all. He had 40 jobs in four years after leaving school at 16 that even included a spell as a gravedigger. At 20, he then decided to go to college to study business and later trained for his CIMA accountancy qualification at a Croydon electronics manufacturer before going into the profession with KPMG and later Deloitte Haskins & Sells in the 1970s, helping to fight fraud in the copper mines of Zambia and Papua New Guinea.

"They sent me to internal audit and I thought, 'They must be joking. I'm a commercial accountant.' But they said I should try it out, so I did. I remember arriving in Papua New Guinea and the guy running the internal audit section saying, 'Don't sit down. I've got a fraud on in the stores and we will go down now and deal with it.' We got to the stores and this guy said, 'Don't do anything, just watch.' At this point, he went over to a man who was minding the stores, picked him up and held him against the wall saying, 'OK you little bastard. I know you're doing the fraud.

Tell us who else is doing it and we might let you off.' He then dropped him to the floor. Later that day, I discovered that KPMG sent me because I was much bigger than the other accountants."

Another of Dighton's stories involves his employing men from two different Papua New Guinea tribes to work on a shop floor and then getting a phone call in the middle of the night because they were trying to kill each other. Dealing with violence and fraud on such a scale, and on such a regular basis, is likely to colour a young accountant's view of the profession.

But he says that variety is the spice of life. "People think you've been sitting under a coconut tree for three years when, in fact, I've never worked harder than my time overseas. Even Zambian internal audit, which isn't known for its propensity for hard work, was demanding," he says.

Dighton eventually settled down in the 1980s, spending seven years at troubled conglomerate BET from 1986 helping to prepare the company for its eventual sale to Rentokil until "cutting through the fat into the muscle of the business" became boring. He then joined Securicor after answering an advertisement for the role of divisional FD for its vehicle business. He became finance head of its security division in 1997. Dighton was promoted to group FD in June 2002, succeeding Chris Shirtcliffe, who retired after 16 years in the role.

Even with the relative comfort of being group FD of a FTSE-250 company, Dighton believes a no-nonsense management style is still important - especially as Securicor's staff are the victims of 400 serious criminal attacks a year and reputational risk is such a major issue. This, after all, is an industry where the name Group 4 has become synonymous with escaped prisoners. But while Dighton believes Group 4 was "very badly done by", he says companies like it and Securicor are always at risk of negative publicity.

"In the end, it probably didn't do Group 4 any harm, but I don't think it enjoyed the publicity at the time. Group 4's performance was far better than the prison services was at the time. It was mugged by the press. And although Sun readers may laugh at Group 4, anyone in the justice services industry knows it does a good job. That could have happened to us."

Currently, the major risk Securicor is facing is the threat of litigation by the families of 57 passengers on board two flights involved in the September 11 terrorist attacks. Securicor, through its US subsidiary Argenbright, which it bought only nine months before the attacks, was responsible for security at the airports from which those flights departed. "I'm not worried about it (the litigation) one little bit," Dighton says. "The two planes involved weren't those that crashed into the towers - that's the first thing." The second, says Dighton, is that Securicor fulfilled all the terms of its contract with the Federal Aviation Administration (FAA) so it can't be held accountable. But doesn't that sound like hiding behind legalese and contractual rhetoric?

"We didn't do anything wrong. The FAA decided what security measures the airlines needed to adopt and the airlines sub-contracted the management of those. The FAA's decision was that you should stop explosives, guns and knives with blades over four inches long. The blades used were little box-cutting knives, and you could actually buy them after going through the security screening process anyway." But, as Dighton says, "things can change in the US to fit the circumstances", so Securicor has a hefty insurance policy in place to cover any potential damages.

Soon after the attacks, the US authorities federalised security checking at its airports and Argenbright, now greatly reduced in size, is ring-fenced from the main group without any UK directors on its board. "We can walk away, and the business only has about £20m of assets. It's not a big deal." So, is ring-fencing overseas subsidiaries a standard practise? "It is now," Dighton says. "But we had to make sure all the rules were followed."

With such a widespread organisation dealing in such sensitive areas as prisons and cash-handling, Dighton says it pays to have the right screening of employees and "lots of detailed procedures" in place. This includes having people in the organisation that can provide the right level of challenge to senior management. An ex-policeman, Sir Paul Condon, for example, sits on the company's audit committee to which Dighton reports. "He asks fabulous questions. He's brilliant and knows what he's doing," says Dighton.

In other areas, Securicor's corporate governance is not world-class. Former Securicor chief executive Roger Wiggs sits on the board as a non-executive, for example. "We were a bit worried about him at first, but we knew him well enough to know he wouldn't meddle," Dighton says, even though meddling by non-execs is encouraged these days.

Along with keeping an eye on internal controls, Dighton's current focus is to communicate Securicor's business better to the investment community following the implementation of a new structure based around three divisions: cash management, security and justice services. But while Securicor sold off the last of its distribution businesses to Deutsche Post for £192m in 2003, Dighton says the markets still treat Securicor as a highly diversified conglomerate. "Our shares are still a bit discounted to our peers and it's hard to tell why. The US litigation is always the excuse used, but I'm not sure it's just that. Maybe we've given the impression that cash services growth is more difficult than it is."

Recently, Dighton has freed up more time to step back from his operational duties and work on 'softer' skills, such as corporate communications.

"Talking to analysts and shareholders is more time-consuming than I thought, but we have taken a brand new approach to it," Dighton says. The problem in the past was that most of the analysts were only interested in the 40% stake Securicor held in telecoms operator Cellnet (which it sold to BT in 1999 for £3.15bn) and not about the core security businesses.

Now the business analysts have come on board and Dighton makes himself available to all interested parties. "If someone wants to see us we see them. It's done on a kissing-frogs basis: people might not be our investors at the moment, but they might be in future." The only problem, Dighton says, is that analysts are too short term. "At one point they might say we're not diverse enough so why don't we get some extra products? The next time we see them they might say, 'Why don't you focus more on the cash services business?' They can be short term for sure, because they need to generate activity."

The risk for Dighton is that he loses touch with the operations side of the business. "Sometimes you wonder whether it is worth spending quite as much time (on communication) ... We could delegate some of that responsibility in the future," he says. "The big thing for me is that I haven't got any operational responsibilities any more." But he also says his hands-on management style will prevent him losing touch completely. "Sure, as a group FD there are structures in place that mean I can't just pick up the phone to Securicor's Kenya FD, but that doesn't stop him picking up the phone at any time, calling me and saying, 'Look, I've got a problem.'"

And going forward, it is the people within his finance function that are Dighton's biggest priority - striking a balance between the technicians and the strategists to ensure his successor will have the strongest team to work with whether he or she is operations-focused like Dighton or a technician. "An accountant is either a strategic man or a detail man - he's never right in the middle," he says. "You need to keep your eye on staff and develop them properly. People are my number-one priority."

Dighton says it is inevitable that his job will become more office based and, as Securicor gets bigger, he will become more removed from the business - not that wanderlust is a problem anymore. "Accountancy is the best job in the business. You get to see the whole of the organisation and understand the whole business. And, in a large organisation, you get variety and a range of enjoyment by staying in one function," Dighton says. "In the past, if there was something I hadn't done before, and it sounded fun, then that was for me." But, for the moment, Dighton is happy to fight crime from a comfortable office in leafy Surrey.

CURRICULUMVITAE
Name: Trevor Dighton
Age: 53
Qualifications: CIMA

Career
2002: Group finance director, Securicor
1995-2002: Divisional finance director, Securicor
1986-1994: Finance director, security division, BET plc
1983-1986: CEO, newspaper and media company
1981-1983: KPMG, Papua New Guinea
1977-1981: Audit manager, Deloitte Haskins & Sells
1974-1977: Internal audit, KPMG, Zambia

Biggest challenge? Taking the business to the next stage of growth.

Biggest hassle? I'm fairly easy going. Not an awful lot hassles me. When the job gets to be a hassle, that's when I start worrying.

What keeps you awake at night? Nothing. I can sleep on a clothes line, which really annoys anyone I fly with.

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