The editorial team from Financial Director ran a think tank designed
to generate ideas about best practice in business management. The three sessions
identified areas where senior management in general – and FDs in particular –
could have a real influence to try to ensure that companies stop engaging in
value-destroying practices and to encourage value-creation.
A lot of ground was covered, with discussion ranging from budgeting and
strategic planning to employee remuneration to governance and ethics. The
consensus of ideas generated in these think tanks will form the basis of a short
White Paper to be published in the next few weeks that will seek to identify a
number of key principles that every organisation ought to adhere to.
“It was a very valuable and successful series of sessions,” said editor
Andrew Sawers. “The results that came out of our discussions with FDs will be a
little uncomfortable for some managers.” The White Paper will be released early
in the New Year.
To the extent that most people plan their careers, it’s probably “bottom-up”
planning, according to Mark Freebairn, head of the CFO practice at headhunting
group Odgers. The key question becomes, “What do I want to do next?” But
eventually, he says, people take a different look at their career and ask
themselves, “What do I want to achieve? What experience do I need to gain to
make that happen?”
“The earlier you do this, the greater your chances of achieving that,” he
said at his FD career workshop.
So what do FDs want to do next? A group FD role in a FTSE-100 or FTSE-250
company has its obvious attractions, but, as Freebairn says, at this level,
“It’s as much about profile as it is about the job.” FDs in such companies will
get written about in the newspapers and, to that extent, they will find that
they can’t control everything the way they might be used to in lower-profile
jobs. He adds that an FD role in a FTSE-Small Cap or Aim company still gives
quoted company experience, “but you can still wrap your arms around the
Private equity has been dominating the market for four or five years, now,
Freebairn said. While an FD job in a private equity-backed company has its
obvious attractions, he warned that such a move makes it more difficult to go
back into the mainstream corporate environment, even if the FD makes a success
of it – and especially if he doesn’t.
Professor Scott Moeller of Cass Business School gave a presentation that sought
to inject a more entrepreneurial approach into every company. “Are managers
working harder and harder for smaller and smaller efficiency gains?” he asked.
“Is the company paying more and more for each percentage point gain in market
share?” If the answer to such questions is yes, then the business needs more
“corporate entrepreneurship”, he argued – and no, that’s not an oxymoron, he
said. What’s needed is to be able to recognise an opportunity that is based on
customer value creation then balance vision with managerial skill and passion
The disadvantage that corporates have compared with start-ups is that the
intellectual property is owned by the company, there are usually limits to the
rewards that can be earned and decision-making is slower. Having said that,
Moeller added that corporates are better placed to absorb risk and failure.