You need to pack your bags and go far, far away if you want that top finance job. International experience matters, and having overseas experience has become an advantage to the finance directors that reach the zenith of the profession.
This has long been the case for CFOs in the FTSE-100 and at multinationals. Just look at the CVs of the likes of Liz Doherty, CFO of Reckitt Benkiser, who has worked in Australia, Spain, the Netherlands and Thailand, as well as in the UK.
“If you do not have international experience, it will limit your career progression. When you get to the top level in finance, the difference between you and the opposition is almost zero,” says Mark Freebairn, partner in the CFO practice at headhunter Odgers Berndtson.
The requirement for top-level finance professionals to become more internationalised and possess global finance and management skills is also becoming more prevalent among SMEs. It is no longer the preserve of big business.
According to Tim Vye, operations director at recruiter Reed Finance, this trend has come about because multinationals are moving towards centralised finance functions and taking up international accounting standards. As a result, employers expect finance professionals to be flexible and work from international locations.
Vye adds that he has recently noticed an increase in SMEs requesting candidates who already have international experience.
“We see this taking place right across the board. Historically, it has been multinationals that have asked for people with foreign language skills, but in the last year this has also become the case in the SME sector,” Vye tells Financial Director.
That is partly as a result of the trading conditions in the UK. SMEs are diversifying their business and they are looking for new markets abroad. Emerging economies also present opportunities for cheap labour and low costs of production.
“Our manufacturing clients are looking to go abroad and manufacturing is increasingly taking place in central and eastern Europe. They are targeting fast-growing sectors to sell their services into,” says Vye. “High-tech manufacturers are going to look to produce goods overseas cheaply. The transport costs might be higher overseas, but they also have opportunities to trade in the country.”
But the need for finance professionals to have greater levels of international nous is not just restricted to those businesses that can be physically found on the ground. Globalisation and the power of international trade have been just as important, says Freebairn.
“The world has got much smaller as the world economy has shrunk, so businesses want to trade with further-flung companies and countries,” says Freebairn. “Because of the production costs, more companies are trading with countries they have not traded with before. Places such as India and China: those markets and counties were closed to us 10 to 20 years ago. For SMEs and FTSE businesses, it is all about where they have products that they can trade with the international marketplace.”
Yet it was not long ago that the FDs of businesses with international reach were not required to have international experience themselves. The books could be balanced as easily in London as they could in Shanghai or Dubai. And it was unlikely that a financial accounting qualification from the UK could be bettered anywhere else.
For companies building businesses in emerging markets, the real need for having employees with an international background, or from the local area itself, was in consumer-driven functions.
“To have never traded or grown up in a marketplace makes it very difficult to do the job,” says Freebairn. “To understand the local accounting regulations and combine that with a global accounting business, you did not need to be from the country.”
But the role of finance has changed dramatically and is designed to do more than it used to in terms of operations and group strategy.
“You have now got to go out and challenge what is going on in the local market and economy,” says Freebairn. “If you do not know how that works, you are not going to be as attractive a candidate. Everything points to the role of finance becoming more operational and more international. Not having that experience can seriously limit what you can do.”
Increasingly, the norm for those holding the top-level finance positions at international businesses is to speak at least one foreign language. FDs are also being asked to prove they understand the unique barriers to trading in their organisations’ markets, such as the countries’ often unique regulatory environment, different tax regimes and various legal requirements.
Paul Brooks, CFO of Experian, who has worked in finance positions in Singapore, the US, Belgium and Dubai, says that understanding local financial reporting, legal and tax quirks is naturally helped by being in the location. But the softer skillset the FD can pick up is perhaps even more important.
“Working abroad does broaden your mind. It makes you more sensitive to ‘softer’ things such as local culture and business etiquette,” Brooks tells Financial Director. “In most organisations, you are right there working alongside the CEO. You are a key member of the management team, so you need to develop communication skills as well as commercial skills.”
Those tasked with recruiting CFOs who have cultural know-how agree that it is an essential skill which is needed if the candidate is to adapt and smooth the path for their business in far-flung locales.
“You cannot work in Brazil, China or even developed markets such as Spain if you do not understand the local business culture,” says Freebairn. “From the local point of view, you cannot be trusted unless you are assimilated into the culture.”
In places such as China and Japan, a failure to understand the nuances of the local business culture can be potentially damaging to your business and relation-ships with local partners.
Nigel Marsh, group FD at Reed, who spent five years working as commercial director at Japanese business Fujifilm Electronic Imaging, gives an example of boardroom etiquette. In western business culture, it is much more likely that grievances and problems will be aired in board meetings. This is not often the case in east Asia, he says.
“In terms of the local culture in east Asia, it is much less likely that difficult issues will be addressed in meetings because of a perceived loss of face,” says Reed. “It is important that you can filter the information you are getting. Unless you understand the culture, you do not know if the information you are getting is correct.”
The idea of losing face is much more profound in Chinese and Japanese business culture than someone from a western business background might expect. According to Doug Alliston, MD of CFO Services Asia and former group FD for Asia and the Middle East at Interior Services Group, the Asian concept of losing face means embarrassment – but this is the concept in its simplest form.
“It is critical to building relationships in China. Within their business circle you must avoid causing loss of face,” he says. “But you can also give them face, by providing clients with something that adds value to their image or profile.
“When negotiating a contract, the tone and body language you use can be just as important as what you say. If you cause too much loss of face, you could risk burying a deal without even getting round to discussing the basic concepts.”
Chance or design
Both Brooks and Marsh believe their knowledge of Asian markets helped them land their current positions. Both companies had been pursuing international growth strategies with a particular emphasis on Asia.
“When I joined Experian as FD of the former international division, the company was looking to develop its international business,” says Brooks. “That was an advantage for me: I had worked in the environments where the business wanted to expand and that gave me a better view of how to succeed. The time I spent in Asia meant I knew my way around, but it was also about having that international mindset.”
While both Brooks and Marsh have benefited from international experience in their career development, they have taken very different routes in gaining that experience. Brooks boasts the more exotic path of the two, but adds that this was down to chance as much as design.
He began his career by qualifying as a chartered accountant with a Big Four accounting firm and was proactive about getting international experience.
“There was an opportunity with KPMG to go to Dubai, which gave me very good business experience,” he says.
When Brooks returned to the UK, he joined ICI and worked in its corporate reporting group.
“I participated in a company-wide reorganisation and the senior management team moved to Brussels. It was by chance the next overseas opportunity came up,” says Brooks.
He then spent five years at GKN, mostly as divisional CFO in the US before becoming Inchcape’s marketing services FD, based in Singapore. At this stage, Brooks only considered positions at international businesses.
He says one of the features of international experience is that you get more responsibility earlier.
“If the company will support you in an international move, the chances are they will invest more and will want you to advance,” he says. “If you are in an overseas subsidiary, it may be a smaller company but you will work at a more senior level.”
Marsh, on the other hand, has not led the globe-trotting business life of Brooks. He cut his international teeth at Fujifilm. Marsh was based in the UK but frequently travelled to the company’s domestic market. He says this can serve FDs just as well as living abroad.
“People who work in an international company and get out there for a four-month placement can make a real difference. In the group FD role, it means spending a lot of time in the target markets,” Marsh says. “The most rewarding finance career is where you are involved with a wide breadth of countries. When that is the case, being in the host country is not so important; it is about networking across different regions.”
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