Strategy & Operations » Governance » Editor’s letter: Charmed, I’m sure…

Andrew Sawers

Barring any last-minute glitches in the carefully planned arrangements, I’m
going to meet a finance director tonight. Unusually, I admit to a certain amount
of trepidation because, you see, this particular FD has something of a

He doesn’t easily fit into the mould from which are cast most FDs I have had
the pleasure to meet. Certainly, he has a quite formidable mastery of his
numbers. This gives him the sort of air of authority that one might expect from
a ‘granite-jawed Scottish accountant’, if you know what I mean, but nowhere near
as much of the charm.

To look at the bottom line his organisation has delivered, you would have to
say that it’s pretty impressive. The decade or so before this FD took over had
been marked by extraordinarily exuberant bursts of growth – and at least one
spectacular financial meltdown. That’s all seemingly been consigned to the past
for, on one measure, this FD’s organisation hasn’t once had to report a downturn
in performance – an extraordinary performance for an organisation that was once
regarded as having gone ex-growth. Having said that, this FD has little shame in
claiming at least some of the credit for the performance of his predecessor
(who, again to be fair, had the benefit of starting from a low base, thanks to
his predecessor).

So indeed, this FD I’m meeting tonight has had his successes, to be sure. One
of them was to restructure the business and reporting lines to outsource active
cash management, ceding to the outsourced treasury manager responsibility for
minimising the prospect of any interest rate shocks.

Regrettably, this FD has never been one to reach out to the rest of the
organisation very much. Some of the divisional directors with whom he works have
been allies, of sorts, but any concept of finance being a partner of the
organisation rather than ‘the expenditure police’ hasn’t been in evidence here.
On the contrary, there is some evidence that his finance department has schemed
against other departments’ expansion plans rather than trying to find ways to
enable them.

Then there’s the accounting tricks. Creative but ultimately expensive
off-balance sheet funding has been masquerading the true picture. And he’s often
taken a schemer’s delight in disguising how he generates revenue – some
headline-grabbing sleight-of-hand, like high street retailers that offer
‘discount’ prices when, in fact, the product in question was on offer at the
higher price in the Scunthorpe branch for four weeks prior to the ‘sale’.

What most intrigues me is that this FD actually wants to be the boss – the
chief executive. The board seems certain to approve the appointment – but the
next shareholders’ general meeting might have something else to say about it.

I’m looking forward to meeting this FD – the FD of the United Kingdom itself.
I’m looking forward to meeting Chancellor of the Exchequer Gordon Brown tonight.