The accountancy qualification has long been regarded as essential forst that,
with more than three-quarters of FTSE-100 FDs being trained accountants, the
qualification still counts for something. aspiring financial directors. No
self-respecting FD would ever expect to make it onto the board of a FTSE-100
company without having a set of letters after their name to prove that they know
how many beans make five – and how to make it look like six (or four, if you
prefer). But that’s no longer true.
Financial Director’s first ‘beancounters survey’ looks at two aspects of the
FD’s changing role.
Firstly, we examined the extent to which FTSE-100 FDs are qualified
accountants.
Increasingly, the FD’s remit is seen to be growing to encompass more broadly
based business strategy issues, ‘partnering’ other board members in a way that –
arguably – makes an accountancy qualification, as such, unnecessary.
Secondly, if it is true that the FD’s role now equips him for a job that
involves deciding what beans to count, rather than merely how to count them,
then we thought it would be useful to see how many former FDs are now chief
executives in the FTSE-100. (We also looked at FTSE chairmen, but the nature of
that role varies between the ‘chairman and chief executive’ head honcho, as at
British Steel, to the ‘professional non-exec’.)
Our findings show that just over three-quarters of FTSE-100 FDs have an
accountancy qualification. The ICAEW and the ICAS in Scotland are the dominant
institutes, with 55 FDs calling themselves chartered accountants.
Fifteen FDs came through the CIMA management accountancy route, while just
six are ACCA certifieds (two FDs – Richard Lapthorne at British Aerospace and
Kenneth Hydon at Vodafone – are members of both institutes, so that’s why our
FTSE-100 table adds up to 102). Two CIPFA public sector accountants feature,
both at privatised utilities. There are also two US-qualified accounts. Four
companies have no named financial director.
There is a certain predictability about the explanations for these figures.
Senior-ranking chartered accountants will talk about the fantastic training
and discipline of the institute programme; certifieds will gladly explain that
they are in “the next generation” of FDs, because theirs is a younger membership
that has yet to “trickle up” into the older, more experienced echelons of the
FTSE-100; CIMAs will talk about being “close to the business” and point to the
salary surveys that show how their qualification is now hard on the heels of the
chartereds.
Of the 17 FDs who do not appear to be qualified accountants, some may have
qualified in the past but have not maintained their membership. Charles Miller
Smith, for example, current chief exec of ICI and former FD of Unilever,
describes himself as “a lapsed ACCA”. But is an accountancy qualification of any
sort really necessary to be a FTSE-100 FD?
Roger Mann, the FD of Siebe who was interviewed by us in our April issue, is
quite emphatic: he says: “It’s imperative to have an accountancy qualification
to survive in the current financial world.” Mann even emphasises the importance
of the basic, solid number-crunching skills: “The FD should have a good
knowledge of UK accounting standards and international standards and US GAAP,”
he says.
Simon Duffy, who, as FD at music group EMI, has an MBA but is not an
accountant, could not disagree more. He says an accountancy qualification is ”
not important at all.” It’s all down to the structure of the finance department,
he adds: “The idea is to employ accountants.”
So, no agreement there, then. The only way to resolve this one, presumably,
is to answer three questions: What kind of FD do you want to be? What kind of FD
can your finance department currently support? What kind of FD does your company
need? Other than that, we’ll let the facts speak for themselves.
In the chief executive stakes, about one-in-six chief execs boast an
accountancy qualification or have been FDs in the past – either at their current
company (Compass Group’s Francis Mackay, Keith Oates at Marks & Spencer) or
elsewhere. (By the way, we have to admit to feeling a certain amount of sympathy
for Safeway’s FD, Simon Laffin. Both his chief exec (Colin Smith) and his deputy
chairman (David Webster) have been FD of the company – which must put a certain
amount of “We know how to do your job” pressure on Laffin!)
Predictably, perhaps, many came up through the engineering route, but chief
execs do not lay claim to any particular formal qualification. It’s fair to ask
whether the skills employed by an FD equip him for the chief executive’s job.
Rodney Westhead, the former FD and current chief executive of Ricardo Group,
offers his own insight into this issue in this month’s interview.
Other chief execs, such as Charles Allen at Granada Group, will have done
some accountancy work in their dim and distant past, but moved on elsewhere
within the business world rather than ascend to the rank of FD.
At the highest level in the boardroom, the chairman plays a vital role.
Woolwich plc chairman Sir Brian Jenkins says that the chief exec may run the
company, but the board runs the chief exec. Sir Brian is, of course, a former
senior partner of Coopers & Lybrand, and a one-time president of the ICAEW.
In a similar vein, BTR’s Elwyn Eilledge recently joined the corporate world from
Ernst & Young.
Other beancounting chairmen include Reed International’s Nigel Stapleton,
British Steel’s Sir Brian Moffat and GKN’s Sir David Lees, all of whom were FDs
at the companies they now chair. Sir Ian Prosser, who is the chairman and chief
executive of Bass, is a former FD of that company, too.
We have sometimes argued that, if a barrister or a QC can be Chancellor of
the Exchequer, then why can’t a barrister be a finance director? A controversial
question, almost perfectly answered by Enterprise Oil chairman Sir Graham
Hearne, a qualified solicitor and a former FD at Courtaulds.
So top-level British boardrooms are not short of highly technically qualified
FDs. How this picture changes over the coming years will be interesting to
watch. Meanwhile, there’s one question to ponder: does the rise of accountants
and former FDs to the ranks of chairman and chief executive make it less
necessary to have a qualified accountant in the FD role?
Does the spread of the beancounting FD make his own role redundant? We’ll be
the first to tell you …
FDs' accountancy qualifications
ICAEW 51
ICAS 5
CIMA 15
ACCA 6
CIPFA 2
AICPA 2
Other/none 17
No named FD 4
COMPANY FD QUALIFICATION
3i Group Michael Queen FCA
Abbey National Ian Harley FCA
Alliance & Leicester Richard Pym FCA
Allied Domecq Tony Trigg FCMA
Amvescap Robert McCullough CPA
Asda Group Philip Cox FCA
Assoc Brit Foods
BAA Russell Walls FCCA
Bank of Scotland
Barclays Oliver Stocken FCA
Bass Richard North FCA
BAT Industries David Allvey MSCI, ATII, FCA
BG Philip Hampton CA, MBA
Billiton Michael Davis BCom SA
Blue Circle Industries James Loudon MBA
BOC Group Tony Isaac FCMA
Boots David Thompson FCA
British Aerospace Richard Lapthorne CBE, BCom, FCMA, FCCA
British Airways Derek Stevens MBA, FCA
British Energy Michael Kirwan FCA
British Land John Weston Smith MA, ACII, ACIB, FCIS
British Petroleum John Buchanan
British Steel John Rennocks FCA
British Telecom Robert Brace FCA
BSkyB Nick Carrington FCA
BTR Kathleen O'Donovan ACA
Cable & Wireless Robert Lerwill FCA
Cadbury Schweppes David Kappler FCMA
Carlton Communications Bernard Cragg ACA
Centrica Mark Clare FCMA
Commercial Union Peter Foster FCCA
Compass Group Andrew Lynch FCA
Diageo Philip Yea FCMA, FRSA
EMI Group Simon Duffy MBA
Energy Group Eric Anstee FCA
Enterprise Oil Andrew Shilston ACA, MCT
GEC John Mayo ACA
General Accident Philip Twyman FIA
GKN David Turner FCA
Glaxo Wellcome John Coombe FCA, FCT
Granada Group Henry Staunton FCA
Great Universal Stores David Tyler FCMA, MCT
Guardian Royal Exchange James Morley FCA
Halifax Roger Boyes FCMA
Hays David Tibble FCA
HSBC Holdings Douglas Flint CA, ACT
ICI Alan Spall FCA
Kingfisher Anthony Percival FCA
Ladbroke Group Brian Wallace ACA
Land Securities James Murray FCA
LASMO Dick Smernoff CPA
Legal & General Anthony Hobson FCA, MBA
Lloyds TSB Kent Atkinson
LucasVarity Neil Arnold FCMA
Marks & Spencer Robert Colvill
National Grid Stephen Box FCA
National Power Roger Witcomb
NatWest Bank Richard Delbridge FCA, MBA
Next David Keens FCCA, MCT
Norwich Union Michael Biggs ACA
Nycomed Amersham Giles Kerr FCA
Orange Graham Howe FCA
P&O Steam Navigation David Morris FCA
Pearson John Makinson
Powergen Peter Hickson FCA
Prudential Corp Jonathan Bloomer FCA
Railtrack Norman Broadhurst FCA, FCT
Rank Group Nigel Turnbull FCA, MCT
Reckitt & Colman Iain Dobbie
Reed International Mark Armour ACA
Rentokil Initial Christopher Pearce FCA
Reuters Rob Rowley ACMA, MBA
Rio Tinto Christopher Bull FCA, MCT
Rolls-Royce Michael Townsend FCA
Royal & SunAlliance Paul Spencer FCMA, FCT
Royal Bank of Scotland Robert Spiers ACIS
Safeway Simon Laffin ACMA
Sainsbury, J Rosemary Thorne FCMA, FCT
Schroders Nicholas MacAndrew FCA
Scottish & Newcastle Derek Wilkinson CA
Scottish Power Ian Russell CA
Severn Trent Alan Costin FCA
Shell Transport & Trading
Siebe Roger Mann FCA
SmithKline Beecham Hugh Collum FCA
Smiths Industries Alan Thomson CA
Standard Chartered Peter Wood ACIB, FCT, FSS, BSc, MSc
Sun Life & Provincial Gilles Avenel
Tesco Andrew Higginson
Thames Water David Luffrum IPFA
Tomkins Ian Duncan FCCA, FCT, FIMgt
Unilever Hans Eggerstedt
United News & Media Charles Stern ACMA
United Utilities Bob Ferguson IPFA
Vodafone Group Kenneth Hydon FCMA, FCCA
Whitbread Alan Perelman MA, MSc, MCT
Williams
Wolseley Steven Webster CA
Woolwich Rob Jeens FCA
Zeneca Jonathan Symonds FCA
The bulk of our research data came from the March 1998 edition of the
Price Waterhouse Corporate Register. To keep the exercise as simple as
possible, we have not made adjustments for any subsequent changes, such
as, most tragically, the untimely death of BSkyB FD Nick Carrington.
Other information was derived from institute members' directories and
company annual reports.
The Price Waterhouse Corporate Register is published by Hemmington Scott
(0171) 278 7769.
COMPANY CHIEF EXEC QUALIFICATION? PREVIOUS FD ROLE?
3i Group Brian Larcombe 3i
Abbey National Peter Birch CBE, FCIB
Alliance &
Leicester Peter White
Allied Domecq Antony Hales BSc, MCIM
Amvescap (two chief execs)
Asda Group Allan Leighton
Assoc Brit Foods Garfield Weston
BAA Sir John Egan MBA, FIC
Bank of Scotland Peter Burt MA, FCIBS, MBA
Barclays Martin Taylor
Bass Sir Ian Prosser FCA Bass
BAT Industries Martin Broughton FCA Eagle Star
BG David Varney
Billiton Brian Gilbertson MSc, MBL
Blue Circle Keith Orrell-Jones FIMgt
BOC Group Danny Rosenkranz BSc, MSc, DipBA
Boots Lord (James) Blyth FRSA
British
Aerospace Sir Dick Evans CBE
British Airways Robert Ayling
British Energy Peter Hollins
British Land John Ritblat FSVA
British
Petroleum John Browne MA, MS, FEng
British Steel Sir Brian Moffat OBE, FCA British Steel
British Telecom Sir Peter Bonfield CBE, FEng, FIEE,
FBCS
BSkyB Mark Booth
BTR Ian Strachan MA, MPA
Cable & Wireless Richard Brown BS (Comms)
Cadbury
Schweppes John Sunderland
Carlton Comms June de Moller (md)
Centrica Roy Gardner British Gas,
Marconi
Commercial Union Sir John Carter FIA
Compass Group Francis Mackay FCCA Compass Group
Diageo John McGrath BSc
EMI Group James Fifield
(EMI Music) BBA, MBA
Energy Group (two chief execs)
Enterprise Oil Pierre Jungels
GEC George Simpson
General Accident R A Scott AAII
GKN CK Chow BS, MS, MBA
Glaxo Wellcome Robert Ingram
Granada Group Charles Allen FCMA, FHCIMA
GUS (no single chief exec)
GRE John Robins FCT Willis Corroon,
Fitch Lovell
Halifax Mike Blackburn
Hays John Napier
HSBC Holdings John Bond FCIB
ICI Charles Miller Smith (lapsed ACCA) Unilever
Kingfisher Sir Geoffrey Mulcahy MBA British Sugar,
Norton Abrasives,
Woolworth
Ladbroke Group Peter George
Land Securities Ian Henderson BSc FRICS
LASMO Joseph Darby
Legal & General David Prosser FIA, FSIA
Lloyds TSB Peter Ellwood FCIB, CIM
LucasVarity Victor Rice
Marks & Spencer Keith Oates MCT Marks & Spencer
National Grid David Jones
National Power Keith Henry
NatWest Bank Derek Wanless FCIB, MIS, MA
Next David Jones FCCA, FCIS Grattan,
Kays Mail Order
Norwich Union Richard Harvey FIA Norwich Union
Nycomed Amersham Bill Castell FCA
Orange Hans Snook
P&O Sir Bruce MacPhail FCA
Pearson Marjorie Scardino
Powergen Edmund Wallis CEng, FIEE,
FIMechE, CIMgt
Prudential Corp Sir Peter Davis
Railtrack Gerald Corbett Grand Met,
Redland
Rank Group Andrew Teare
Reckitt & Colman Vernon Sankey
Reed
International John Mellon
(ch exec IPC)
Rentokil Initial Sir Clive Thompson BSc, FCIM,
FInstD, CIMgt
Reuters Peter Job
Rio Tinto Leonard Davis FAusIMM, FRACI
Rolls-Royce John Rose MA, FRAeS
Royal &
SunAlliance Robert Mendelsohn
Royal Bank George Mathewson CBE, PhD,
FCIBS, MBA
Safeway Colin Smith FCA Safeway
Sainsbury, J Dino Adriano FCCA
Schroders Peter Sedgwick
Scottish &
Newcastle Brian Stewart CBE, CA Scottish &
Newcastle
Scottish Power Ian Robinson BSc, FEng,
FIChemE
Severn Trent Victor Cocker MIWEM
Shell T&T Mark Moody-Stuart
Siebe Allen Yurko MBA
SmithKline
Beecham Jan Leschly
Smiths
Industries Keith Butler-
Wheelhouse
Standard
Chartered Malcolm Williamson FCIB, FIB,
FIMgt, FInstD,
Sun Life &
Provincial Mark Wood
Tesco Terence Leahy
Thames Water Bill Alexander FEng, FIMechE,
FIMinE, MIOD
Tomkins Greg Hutchings MBA
Unilever (no one chief exec)
United News &
Media Lord (Clive) Hollick
United Utilities Derek Green FRICS
Vodafone Group Christopher Gent
Whitbread David Thomas
Williams Roger Carr
Wolseley John Young CIAgrE
Woolwich John Stewart
Zeneca Sir David Barnes CBE, FIMgt
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