John Smith, 43-year-old finance director of the BBC, saw off strongcompetition to walk away with the Finance Director of the Year Award atthis year’s Accountancy Age Awards for Excellence. The award, sponsored byFSS Financial and Financial Director magazine was presented at The NaturalHistory Museum on 7 November 2001 in front of a packed house of senioraccountants.
Joint runners-up Peter Anderson, the FD who helped turn Canary Wharf intoa profitable business, and Gaynor Coley, the financial brains behind theEden Project, both impressed the judges. But Smith’s outstandingachievements in the face of “nightmarish bureaucracy” won out.
“It is very easy to overlook the shambles in place before he (Smith) tookover,” said one judge. “He turned the BBC into a different organisationfinancially.”
Smith joined the BBC’s corporate finance department in 1989. In the early1990s the BBC almost breached its borrowing limits and had a financialcrisis known as ‘the missing millions’. It was Smith’s job to set thefinance department on the straight and narrow when he became FD in1997.
After negotiating a healthy licence fee settlement in 1999 that provided apromise of real revenue growth, the government set the BBC some toughfinancial targets.
Smith was given the task of increasing expenditure to £450m a year by 2004while at the same time maximising profitability.
“If you’re going to take £2bn of public money each year, coming with it isan expectation that the BBC will be accountable,” Smith told FinancialDirector in an interview in September 2000. “Our feet need to be keptclose to the flame, it’s quite right. It is hard work when you are doingit, but is any harder as a plc FD having to stand up in front ofshareholders? Well not really.” That higher level of scrutiny, financialresponsibility and transparency is exactly what Smith has deliveredsince.
During the past financial year Smith has led the implementation of a newSAP accounting system – combining 11 legacy systems – taken charge of thecompany’s property strategy and reduced the cost of licence fee collectionand evasion to 10.8%. The BBC has also started sending annual reports tolicence-fee payers showing it has provided value for money, while Smithhas negotiated the first contracts between Auntie and the privatesector.
To save costs, the BBC created a new subsidiary, Technology Ltd, which isexpected to save 20% a year by 2004 in price reductions for technologyservices. Under Smith, cost savings for the year were £45m, ahead of theBBC’s £25m target.
After the ceremony, Smith told Financial Director how pleased he was tohave won the prestigious award. “It was real delight to win,” he said.
“I have been both praised and ribbed by people. I work in an industrywhere awards are regular fare, but it is very unusual for an accountant toget one. It would have been nice to receive it in front of pop stars andcelebrities, but I guess accountants will do.”
Modestly, Smith puts his success down to the company, his staff and arecent change in leadership. “You can’t fail but be highly motivatedworking at the BBC. The product is sexy, the people are really interestingand the talent we employ is second to none,” he says. “And since Greg Dykearrived a couple of years ago he has transformed the team spirit at thetop level. The combination of the BBC being a great place and having agreat leader make me very motivated.
“This change also means that my role has developed fundamentally from justmanaging the money to operational responsibility, property strategy,looking after programme rights and running the BBC archive – one of themost interesting areas in the BBC. It’s a great fun job that has becomemuch broader in the past year,” Smith says.
So what has a modest man like Smith done with his award? “I have put itright in the middle of my open plan desk so everyone walks by it. We alsohave to sit around it in meetings and bask in its glory,” he says.
ACCOUNTANCY AGE AWARDS: WINNERS AND RUNNERS-UP
FINANCE DIRECTOR OF THE YEAR
Winner: John Smith, BBC
Shortlisted: Peter Anderson, Canary Wharf, Gaynor Coley, The EdenProject
FINANCE TEAM OF THE YEAR
Winner: Eden Project
Shortlisted: BBC, National Audit Office
ANNUAL REPORT & ACCOUNTS
Winner: HM Prison Service
Shortlisted: BBC, Geest
PERSONALITY OF THE YEAR
Winner: Nick Montagu, Inland Revenue
Shortlisted: Ian Buckley, Tenon Group, John Coombe, GlaxoSmithKline,Howard Davies, FSA, Nick Land, E&Y, Graham Ward, ICAEW.
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