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Insight – Why oh why?

In mid March, the resignations of three FTSE-250 FDs were announced in the space of two days. Is there something we don’t know?

On 14 March, it was revealed that Darren Shapland, FD of Carpetright, and Ian Dyson, Rank Group’s FD, would both be leaving, followed by news on the following day of the departure of Dennis Millard, FD of Cookson Group.

Millard, group FD since 1996, has seen the materials technology company through a strategic review and refinancing. He will stay on until a replacement is found but then plans a “complete break for a period” before seeking new challenges.

Cookson chairman Bob Beeston described Millard as an “outstanding” FD, who is leaving the company “on a sound financial footing”, although the same day the company revealed its fourth successive annual loss (after exceptionals).

The other two leavers, Shapland and Dyson, both have new companies – FTSE-100s – already lined up. Shapland (a youngster at 38) is joining J Sainsbury, while Dyson (42, who has spent five years at Rank helping complete its restructuring) is off to Marks & Spencer. Both companies have been seeking a new FD for some time.

Sainsbury announced last October that incumbent Roger Matthews would be leaving, while M&S announced the planned departure of Alison Reed in early November 2004.

Are there any insights to be drawn? Are FDs who leave with nowhere to go considered not to have cut the mustard? Are all FDs of mid-ranking companies focused on gaining a seat at the FTSE-100 table?

Suzzane Wood, head of the CFO practice for Heidrick & Struggles, London, says it cannot be assumed that when an FD resigns with nowhere to go he/she must have been pushed. “FDs are loyal,” she says. “They often put the company before their own interests, though too many people jump to the conclusion that they are not up to it. Increasingly, CFOs will judge their commitment to the role against the company’s agenda. If the company’s agenda is not in line with their interests or skills, they will rightly highlight that. If you’ve been doing a cost-cutting job and the company’s now ready for growth, you may not be the right person.”

As for joining the FTSE-100, Wood says: “There’s less motivation to go to the FTSE-100 just for the status. It’s no longer the holy grail because of the increased amount of regulation and corporate governance. FDs want to have an impact on the business in a commercial way. It may be that the larger the business, the less they can do that.” So don’t be fooled.

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