Way, way back in 1984, when Sir Clive Sinclair was famed for his Sinclair Spectrum and the ignominy created by the disastrous launch of the C5 was still a few months away, VNU Business Publications launched Financial Director magazine.
One of the first interviews undertaken by its editor Peter Krijgsman was with Michael Julien – the first FD of a clearing bank, Midland. For all the importance attached to his accounting background, and the amazement that there were fewer FDs involved in the strategic direction and governance of financial services institutions, Julien ironically pointed out at the time that there is “too much emphasis on the accountancy qualification”.
And we find ourselves, 30 years on, with some breadth in the backgrounds of finance chiefs. But the role is still dominated at the top by chartered accountants. And, post-crisis, the demand for accountants and CFOs to fill the key non-executive governance roles as chairmen or audit committee chairs suggests that the need for probity, financial acumen and ability to ask difficult questions has never been more important.
The requirement for these skills has come as the FDs themselves have had to broaden out to become risk managers, strategic right-hand men (and women) and diviners of the future. Oh, and they must be able to both charm and straight-talk the City.
As for the present, FDs are prevalent among banks, including the new ones. Metro Bank CFO Michael Brierley – a chartered accountant, of course – extols the virtue of its branch system, where the floor space taken can be used to undertake back-office functions, or “in store”, as Brierley puts it.
As for the Midland Bank, it was bought by HSBC in 1992. Midland had never really recovered from narrowly avoiding disaster after discovering a huge toxic loan book in its arm’s-length US subsidiary Crocker. In other words, folks, the more things change, the more they stay the same. So expect more of that. But when we’ll get the next Sir Clive invention is anyone’s guess.