FDs need the X-factor for CEO role

When Gordon Brown’s popularity began to wane, a harsh criticism was levelled at him: while he was a fantastic ‘finance director’, expertly steering the country through what was arguably the toughest economic crisis in living memory, he should not have been promoted to become what was essentially chief executive of UK plc.

He had, his critics claimed, been elevated beyond his capability. He was a numbers man – not a leader.

Brown’s subsequent political demise was a stark warning for ambitious company FDs or chief financial officers who had enjoyed a similar boost to their status as the recession took hold.

Once overlooked as mere beancounters, working away behind the scenes to prepare the company accounts, ensure the business was adhering to regulatory burdens and, of course, carrying out the minor job of making sure the business was operating within its financial means, the credit crunch rocketed the average FD into a role of stratospheric importance.

Finance became top of everyone’s agenda and FDs able to successfully guide their companies through troubled times became the poster children of business. Many have since moved on to bigger and better things – the role’s new prominence sparking a flurry of rapid graduations to the star positions of chief executive, chairman or managing director. But murmurs remain around the FD’s suitability.

“It is becoming more common for FDs to take on the role of chairman or chief executive,” Mark Freebairn, head of CFO practice at Odgers Berndtson, says. “While a business grows, the top role tends to go to a marketeer. But when a business is in trouble, as many were during the recession, cost management becomes the most critical element and that job goes to someone with skills of a FD. That is why FDs are currently seen as more valuable to a business.”

David Tilston, a former FD at a number of companies including polymer manufacturer Victrex – who is now a non-executive director at radio technology firm Sepura – agrees. “The balance has shifted from a much more growth-driven, strategic development focus on to whether we have the right controls in place, what the company’s cash position is and on risk management,” he says. “Previously, we wouldn’t have heard so much about the role of FD. There is an economic cycle shift in what companies want from their FDs and their chief executives.”

Tidjane Thiam was one such golden boy of finance for whom life as a CEO went horribly wrong. The African-born former Ivory Coast minister joined FTSE-100 insurance icon Prudential as FD in Spring 2008, scoring promotion to CEO just one year later.

Ten months on, his career is in serious jeopardy. A £24.5bn takeover bid for Asian insurer AIA – the brainchild of Thiam – failed earlier this month, costing the group £450m. The company’s board have stood by their chief executive, but shareholders are now baying for his scalp.