When Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England, warned of growing global debt concerns at CFO Agenda, Financial Director’s live event on 7 May, his words were covered around the world.
Coming at a moment of great uncertainty, his speech was intended to give as clear a view as possible on where the Bank sees threats to global financial instability, at an event that not only explored the major challenges ahead but also offered guidance on how finance leaders and their organisations can thrive in changing times.
“Within corporate debt, the proportion of leveraged lending and lower grade corporate bonds has risen rapidly in recent years, and in the UK and US there is a larger tail of highly indebted companies than there was before the crisis,” said Cunliffe. “Alongside this, protections for investors have been weakened materially,” he added.
Cunliffe also referred to a rapid growth in emerging market debt. “There has been a persistent rise of private debt to record levels in China: excluding the financial sector, private debt has risen from 115% in 2008 to 203% of GDP,” he said.
The focus on the dangers of growing debt came when most attention has been on the effects of Brexit, which Cunliffe touched on. “In the event of a no deal, no transition Brexit, markets would be likely to be very volatile – as they were after the referendum – as prices adjust to that outcome,” he said.
On Brexit, Cunliffe’s views followed an opening keynote address by independent peer Lord Michael Hastings who warned CFOs to be aware of “unknowables” in their risk outlook. A panel chaired by Mercer’s Wayne Fitzgibbon followed, entitled Beyond Scenario Planning-Getting to a Reality after Brexit.
BMW CFO Michael Kreeft was joined by Kate Curnow, deputy CFO of Honda Motor Europe, Best Western Hotels’ director of finance Adrian Burrows and Hays finance director Paul Venables. The recruitment giant’s finance chief said: “For us the worst possible thing is that we have this hiatus period. The quicker we can get to some sort of answer the better,” he said.
Their words were followed by Tim Wakeford, vice president financial product strategy EMEA at Workday, who gave a keynote speech on Shaping Tomorrow’s Financial Function. Earlier he had given a breakfast briefing on the Role of the CFO in 2019 followed by Jorg Wiemer, CEO of Treasury Intelligence Solutions on Cash Management in the Age of Digital Transformation.
Finding a way forward
If the first sessions of the day raised questions about the uncertain environment, the next segment provided multiple examples of how finance leaders can create a finance function fit for purpose in the new conditions.
In the Strategy and Business Partnering silo, William Benson, VP head of finance transformation at GSK, spoke on Finance Transformation begins with Simplification, followed by Mike Lipps, CEO of insightsoftware. He discussed the 3 Analytics Every CFO Needs.
The Technology Transformation section featured Finance Transformation Thanks to Lean Teams and Technology by Guillaume de Pommereau, CFO of Hitachi Europe and Building and integrating a Digital Workforce, by PwC partner Sultan Mahmood.
Talita Ferreira, CEO Authentic Change Solutions discussed Technology v. People in the Performance Efficiency and Talent Acquisition section, complemented by a Digital Transformation and Scenario Modelling talk by Mark Rolfe, sales director UK & Ireland, Jedox.
Pre-lunch, a panel discussion on Optimising Your Digital Transformation Journey, chaired by Rick Payne, manager finance direction programme at ICAEW was followed by a debate entitled Preparing for the Expected and Unexpected, chaired by Stuart Hall, enterprise sales manager at Sage. Guy Strafford, evp market engagement at Proxima Group chaired another talk on Finance and Procurement Working Together to Deliver Business Strategy over lunch.
The afternoon kicked off with a round table led by Gavin Fallon, general manager at BOARD, on Exploring the Future of Decision-making in the Finance Function. David Santoro, partner at EY, chaired one on The Future of Performance Measurement and Reporting in a Finance 4.0 World. Other tables were led by representatives of Bob Rehill & Associates, Hymans Robertson, Oracle, Trintech, Longview, ACL, Vena Solutions UK, Prime Revenue, Engage and PSA.
Addressing the big questions
Some of the big topics of the day were tackled by Rohitesh Dhawan, director of global strategy at Eurasia Group in his talk Geopolitical Risks and Opportunities: Navigating from Trump to Brexit. This was followed in the Strategy and Business Partnering section by Rupert Morrison, CEO of Concentra Analytics and Roger Ellison, organisation strategy director at Accenture, discussing OP&A: Overcoming the Organisational Blind Spot in Finance.
In the Technology Transformation silo, Adoption of AI in Mid-Term Firms was the theme of a talk by Hilary Allen of the University of Sheffield while Mary Fleming, CEO of Financeplus, tackled How Agile Technology Enables Continuous Financial Process Improvement.
Michael Clark, vice president finance & CFO at Coca-Cola European Partners considered Finance: Ever Changing, Ever the Same? Also in the Performance Efficiency and Talent Acquisition section, IFRS 16 leases; Keys to Success in Year One was delivered by John Kuett, head of lease accounting at LeaseAccelerator.
The final part of the day saw some of the biggest challenges facing corporates up for discussion. Bernard Bos, VP global head M&A and commercial finance at Shell brought a keynote address on Financial Transformation and Leading in the Energy Transition.
Diversity and Talent Acquisition was the theme of the afternoon keynote discussion, chaired by Yemi Jackson, CEO and founder of Engage Transform Consultancy. The panel featured Markus Kobler, CFO of Allianz Global Investors, Emma Connell, finance director field operations of Centrica and Coca-Cola European Partners’ Michael Clark. They were joined by Neil Herbert, CFO of Salary Finance, and Caroline Hudson, head of CFO practice at Pure Search.
Peter Williams, chairman of fashion group Superdry, as well as property developer U+I and Domino’s Pizza group DP Eurasia, gave valuable hints in his closing keynote: Why is Communication so Important? He drew on his experience as a CFO for 10 years at Selfridges and roles as CEO, chair, SID and NED across groups such as ASOS, Cineworld and most recently Boohoo.com to argue for strong interpersonal skills, even in the digital age.