Business recovery: Cautious optimism for FDs

The 2008 Financial Director Summit opened its doors just 11
days after hell froze over ­ that is to say, 11 days after Lehman Brothers made
the US’s largest-ever bankruptcy filing. The prevailing sentiment over the next
48 hours was one of shock and awe.

How could we have known that in the following 12 months, our lovingly-planned
session on mergers and acquisitions would meet with a virtual freeze on
deal-flow due to the drying of up funding, easy credit and bank lending having
been the lifeblood of the M&A world in the past decade? How could we have
known that the private equity markets would also suffer from the same fate and
receive the same amount of pain when we planned our session around that market
in 2008?

Title role
By the time the 2009 event rolled around, the team at Financial
Director were fortunate that most FDs in attendance were in the frame of
mind appropriate to the title we’d gambled on this year: “2010: Risks and
opportunities.” Our aim was to give FDs something that really helped them
through the storm and prepare for recovery. And the talk was certainly that of a
bunch of people who were ready for the latter, rather than stuck on the former.

Our speakers provided a rich palette of ideas, opinions and tidbits of
advice. Clifford Chance partner Alistair Woodland boiled down and simplified all
of the talk and regulatory action we have seen around remuneration and the links
to risk and reward ­ something most of us have an opinion on, but few really
know where, compliance-wise, businesses stand; Tony Lomas, lead administrator on
the Lehman Brothers bankruptcy, gave a plenary session on the increasingly
complicated mess he and his team are unravelling in the ex-banking titan’s books
that gave us food for thought on the consequences of too much leverage; FD
headhunting stalwart Mark Freebairn gave a roaringly successful masterclass on
his much-loved theory on FD career progression (involving starting with your
ultimate role, finding out what experience will get you there and working
backwards to forge your plan of attack), while the BBC’s head of finance
operations, Richard Payne, talked us through the Corporation’s ambitious
outsourcing strategy and how it is discovering what can be safely outsourced ­
and what is best kept in-house, in another popular session.

Macro view
Providing our big-picture analysis were our two keynote speakers, Standard
Chartered FD Richard Meddings and HSBC chief economist, Dennis Turner (who is
also our long-standing, irrepressible economics columnist). As one of
government’s special Cabinet that worked on the UK banks’ rescue package, he has
had the inside track on financial strategy and thinking at the very top and did
not hold back on sharing some hard lessons for all FDs, on getting back to
basics and not getting seduced back into too much leverage. Dennis reminded us
that it could all happen again too easily.

Dennis and Richard were joined by leading FDs such as Stuart Bridges of
FTSE-250 reinsurer Hiscox ­ who redomiciled his business to Bermuda in 2005, but
warned that it was not all Pina Coladas and palm trees ­ while Morrisons FD
Richard Pennycook joined us for a second year to give a panel session with
another turnaround expert, Eric Tracey, on galvanising board support for your
ideas as the FD.

Demonstrating how many opportunities there are for the best FDs, even in
troubled times, a few of those who spoke at last year’s event had moved on and
up since, including Tesco’s Andy Higginson (now heading up Tesco’s crucial
personal finance business) and Abbey’s Nathan Bostock (now head of restructuring
and risk at RBS, one of the UK’s meatiest finance roles). So we brought in David
Kappler, chairman of Premier Foods and previously FD of CadburySchweppes, to
give his opinion on what chairmen wanted form their FDs.

In short, an awful lot ­ but judging by the attitude of the FDs in
attendance, they are more than capable of meeting the challenge. Make sure
you’re there in 2010.