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Leader: CFOs must grasp the Brexit nettle and show their worth in times of crisis

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SO often in times of crisis or great change, companies turn to their finance chiefs as the safe pair of hands needed to steer their business through. Whether during the crucible of the financial crisis, instances where internal governance fails or businesses are beset by social-political turmoil, CFOs are frequently required to live up to their billing as custodians of their company’s financial health.

Watching the events of the last few days has reminded me of a quote by Tony Blair made in the aftermath of the 9/11 World Trade Centre attacks. Blair said: “This is a moment to seize. The kaleidoscope has been shaken, the pieces are in flux, soon they will settle again.”

And indeed, this is a moment for the UK finance profession to seize. So often in times of crisis or great change companies turn to their finance chiefs as the safe pair of hands needed to steer their business through. Whether during the crucible of the financial crisis, instances where internal governance fails or businesses are beset by social-political turmoil, CFOs are frequently required to live up to their billing as custodians of their company’s financial health.

When the Co-operative Group suffered its own, self-inflicted existential governance crisis it turned to Richard Pennycook, the CFO who had helped turn Morrisons around. He now leads a much recovered and financially healthy business.

When Lonmin, the FTSE 100 miner, faced its darkest hour in 2012, CFO Simon Scott was made acting CEO when illness forced incumbent Ian Farmer to step aside. It came at a time of violent strikes at its Marikana mine which claimed 44 lives, saw more than 70 injured and the extraction of more than 15,000 ounces of platinum lost after police shot strikers after reportedly being charged. Banking covenants were breached, a rights issue made and stocks dropped six days in a row to 20 August 2012.

The idea of CFO as crisis manager has never been more necessary than now. The UK’s decision to leave the European Union has unleashed profound economic instability, damaged our relationship with our closest trading partners, endangered the fabric of the United Kingdom and ignited the meltdown of Britain’s main political parties. One wonders who is currently actually running the country.

But while politicians appear gripped by paralysis, Brexit offers an opportunity for the finance profession to again demonstrate its worth. In the six years I have written about the profession, the claim that the job of CFO has become more strategic, more operational, more akin to that of a business partner has become a clichéd observation. Now is the time to again demonstrate that fact in practice.

And that means refreshing your currency hedging strategies as the pound and euro are set to face a period of prolonged volatility; investigating the impact on the value of your company’s pension scheme; and enacting change management programmes. You will need to examine your company’s liquidity position, export agreements and supply chains.

But with advancements in data and analytics, finance now sits astride the whole business and can provide a level of insight know other department can. Now is the moment to seize that opportunity and demonstrate the worth of your profession.

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