Diageo CFO goes non-exec at BAE

Cue witticisms about the dangers of mixing guns and booze as Diageo group chief financial officer Nick Rose joins the board at BAE Systems in a non-executive director role.

There are suggestions that after 11 years in the CFO spot with the drinks giant, Rose might be getting itchy feet and looking to broaden his horizons with this non-exec move, which is his third such appointment while in Diageo’s top finance job.

He joined ScottishPower as a non-executive director in 2003 – aged a rather sprightly 45 – when the energy business sought the international experience he brought to bear, having served as group financial controller and treasurer for Diageo progenitor Grand Metropolitan and in corporate funding and capital structuring for Ford Finance in Detroit. He has also been a non-executive director at Moet Hennessy.

He will share his experience in global supply, procurement, strategy and IT as he has responsibility for these elements in the CFO job at Diageo. At ScottishPower he was viewed as the internal ‘audit committee financial expert’ for the group.

Dick Olver, Chairman of BAE Systems says Rose’s “boardroom experience” will be a valuable asset to the business – and no doubt his experience defending the business in front of major regulators will come in handy.

Rose’s CEO, Paul Walsh, himself a former FD and a chartered accountant, recently added his voice to the growing chorus of dissent around an increasingly difficult corporate tax environment for UK businesses by saying that the government “should not take us or any other multinational company for granted” - and that, if the company continued to experience a rise in corporate and personal taxation, it would examine other options.

Rose has not been so vocal but as a member of the main committee of the Hundred Group of Finance Directors probably gets his opinion heard in the right circles, and behind closed doors, where the real clout lies.

Diageo Scotland’s restructuring
Financial Director interviewed Diageo Scotland’s FD, Richard Bee (pictured, right), in our February 2010 issue. He led the controversial restructuring of the Scottish business in 2009 that led to hundreds of redundancies and some plant closures in areas that relied on its employment. Bee led Diageo’s engagement with BDO when the Scottish government called the auditor in to try and persuade the business to reduce the number of redundancies planned, when public anger around it reached a crescendo.

“It [BDO] had no impact on our plans other than confirming that we’d got the right decision… none of the proposals it put on the table came anywhere near what we needed to do and none of them were ideas we had not already considered and rejected ourselves; they resulted in significant job losses, but the financial case was much worse,” Bee told us. “They weren’t viable solutions.”

Sants quits FSA
Hector Sants quit as chief executive of the Financial Services Authority and will end his term this summer as he had always planned to, he says, since taking the role three years ago.

It is thought the resignation was brought on by the prospect of working under a Conservative government. It is well known that the Tories plan to scrap the powers of the FSA – perhaps canning it altogether – and return them to the Bank of England in a reversal of the previous government’s pivotal decision. Sants, the FSA’s managing director for wholesale and institutional markets before his promotion, is said to be against this.

Questions remain over where he will go and who could be a possible successor to the man that steered the regulator through heavy, sustained criticism as it sought to redraw the way it delivered its mandate. Commentators say his departure leaves the regulator in a torrid mess.