When Swag Mukerji, CFO of Centaur, joined the business publisher in 2016 he was to play a key part in turning around the group.
Although he could draw on a wealth of experience in a career as a CEO and CFO across a variety of sectors, the key to the transformation was working closely with Centaur’s chief executive Andria Vidler.
Initially brought in to fix an accounting problem that had resulted in a sharp fall in cash at the publisher of industry bibles The Lawyer and Marketing Week, he soon built up a strong working relationship with Vidler. The key to the success has been how they fit together as an effective partnership.
Mukerji’s working relationship with CEO Andria Vidler is well-defined, ensuring there’s no confusion over roles. “I think we overlap but we don’t step on each other’s toes. We don’t argue about car parking spaces.
“We’re very different in physical stature, in how we think and talk, in our educational backgrounds, so we both had to work quite hard to build this relationship, but it’s now really strong,” he says.
Mukerji says that because he was able to fix the finance system relatively painlessly, he was able to build trust with Vidler early on. He says that the relationship was further enhanced when the two pulled off two important deals in 2017.
“She and I work really closely together, we have complimentary skills and it’s a delight to work with her on that basis. It’s the first time I’ve worked with somebody where we’ve got such good alignment, although I’m not a marketer and she’s not a finance person,” he adds.
Creating good chemistry
The role of finance is changing and the CFO is at the vanguard of this change, increasingly expected to sit alongside the chief executive in driving the business forward, says Wayne Poulton, director, finance, at search firm NB Group.
Poulton says CFOs have traditionally been regarded by some as great at looking in the rear-view mirror but, in an increasingly digitised economy, boards are demanding that the CFO also provides greater analysis and commentary of what the numbers imply, supporting the business to meet its strategic goals. “At the same time, finance is increasingly embracing advances in data capture and analytics, enabling increased automation of previously mundane procedures,” he says.
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“Today’s CFOs must balance the challenges of avoiding the potholes that lie ahead, including political, economic, technological and global change, shifts in consumer behaviour and the rise of activist investors, with ensuring that data generated is more than just noise and succeeds in simultaneously informing the business about historic achievements and providing look-forward predictions and interpretation,” says Poulton.
For Adrian Marsh, CFO of FTSE 100 packaging group DS Smith, experience in key finance roles at pharma giant AstraZeneca and grocer Tesco was ideal for supporting chief executive Miles Roberts as a co-pilot well acquainted with building scale.
The ambition to double the size of the group was delivered in four years, revenues have grown from around £1.9 billion in 2012 to more than £4.8 billion. The plan is now to double again, over the next five years- while offering an innovative approach that ensures competitive advantage.
Cementing the relationship
Marsh says developing a good rapport with the CEO is vital for a CFO to be able to contribute fully their skill set to their organisation. Discussing the interplay with DS Smith’s chief executive Roberts, h says: “Whatever anyone says, it has to be fundamentally about the relationship,” he argues.
“You need to have a relationship where your input is valued and you have the opportunity to make that input, regardless of what the subject is, and you know that input will be listened to and reflected on. If the decision is taken differently, because ultimately there is only one chief executive in a company, and someone is paid to make the final judgement, so be it.
“I can say there’s nothing I don’t feel I can raise with Miles and discuss, and know that he will listen to. He might not always agree with me, but I know that he’ll reflect on it, I know he’ll listen to it, and I know he’ll think about it, and then I know he’ll discuss the basis for having taken the decision, and that’s all you can have, that is as good as it will get as an FD. It’s just knowing that you are part of that, that you’re listened to and what you say is reflected upon.
How important is evidence-based arguments in the relationship? “We’re very fact-based, and again that’s back to your upbringing, Miles is an engineer, he’s very fact-based. I’ve worked a lot in corporate finance, very fact-based, very data-driven, we’re a manufacturing company, some of it is a belief and a view, but it’s still data-driven,” says Marsh.
The tight interplay between CEO and CFO is summed up by Centaur’s Mukerji, a keen rugby player, in a sporting metaphor, he says: “In rugby the scrum half is a key player who when passing often needs to know somebody is there to catch the ball without even looking.” Referring to his relationship with Vidler, he says: “We know that if we’re passing the ball to each other we don’t need to prejudge,” he adds.