What is the role of the FD? This issue raised its head several times at the fifth Richmond Events Finance Directors’ Forum on the P&O ship Arcadia at the end of June – not in a hackneyed “changing role of the FD, no longer a beancounter” kind of way but, rather, addressing the 21st century issues of integrity, strategy, communication and relationships.
Baroness Sarah Hogg, chairman of FTSE-100 venture capital group 3i, launched the event with a speech that made clear that integrity lay at the foundation of everything directors – not just FDs – do. Her comments were timely: the WorldCom disaster was unravelling as delegates headed to Southampton to board the ship – and the Xerox crisis came to a climax on the second day of the conference.
But the FD increasingly seems to be the risk manager and the one everyone relies on to get the corporate governance issues right. “The prime role of the FD is to prevent disaster,” said one FD. “The great danger with accountants is that they say ‘no’ too often and dampen the entrepreneurial spirit.”
Neil Chisman, former FD of Stakis and Thorn and non-executive director of companies including Zetters, chaired a number of sessions under the heading “The FD of the Future”. “I think perhaps it really ought to be called ‘The Best FD of the Present’,” he said. “A lot of media coverage suggests FDs need the leadership skills of Alexander the Great and a brain the size of a computer. It’s designed to make us feel inadequate. My experience is that good FDs are perfectly normal people who just happen to have had some good experience.”
It’s important that the relationship between the FD and the CEO – or the chairman – is strong enough to cope with a robust debate on all the issues, without degenerating into a fight or power struggle. Is it difficult to be loyal to both the CEO and the chairman? “My loyalty is to the shareholders,” said one FD.
Sometimes confrontation with board colleagues is inevitable. Again, the FD’s integrity is both at stake and is a cornerstone in any serious dispute.
One FD explained how her CEO had decided to take a course of action that was contrary to what the board had recently decided. “When I told him that he couldn’t do that, he threw his toys out of the pram and said it was his company and he would run it the way he wanted to,” said the FD.
“I walked out his office and left him to it. An hour later he came and apologised, said that I was right and that he would do what the board had decided.”
Or as Robert Bittlestone, MD of Metapraxis put it in his speech, “If two people agree all the time, then one of them is superfluous.”
Chartered accountant Colin Adams rebuilt the AIM listed company’s finance team and helped turn the business around after a challenging period
Travis Perkins to close 30 branches and could cut as many as 600 jobs, the builders’ merchant said, as it warned on full year profits
O2's new CFO Patricia Cobian discusses the joined-up approach required to improve digital connectivity - and its vital role in improving the UK's economic growth prospects