Andy Halford is a non-executive director at UK Government Investments having previously been CFO at Standard Chartered Bank, Vodafone, and Verizon Wireless, and a non-executive director at Marks and Spencer. Here, he explains why the best training for being a CFO comes from beyond the finance department, why short-term planning is holding us back, and why we all need to think about insight, not just data.
This interview was conducted as part of research by the Board Intelligence think tank, in partnership with ICAEW, Accounting for Sustainability, and Odgers Berndtson, into the CFO’s role in creating a fairer future. To see more CFO insights click here.
Today’s CFOs are like the co-pilot of the CEO, or to use a football analogy, they’re like the sweeper, thinking from a broader business perspective about emerging risks, challenges and opportunities. CFOs who can take responsibility for strategy as well as they do finance can be a strong force within a business.
That breadth of activity makes it a challenge finding the best way to train the CFOs of the future. Someone might have spent years training in financial control but that’s only a small amount of what the CFO does. It doesn’t prepare you for the real action.
The role of CFO today offers great opportunities to dive into all parts of the business and having experience outside of finance helps you to make the most of that. I’ve been lucky over my career to do a wide range of roles. For example, when there are board or leadership decisions to be made about technology challenges in the business, the fact that I’ve been an IT director helps me understand the issue, and gives colleagues reassurance that I can work with them to solve it. That experience is invaluable — alongside of course EQ and IQ — in helping be a 360-degree CFO and have a much wider impact than if I’d spent my whole time siloed in traditional finance-related activity.
Working in a multinational business in a high-transaction, high-volume industry means there’s a hell of a lot of data. Of course, our role in finance is to make sure that data is reliably processed; tolerance for inaccuracy as close to zero as you can get when your raw material is money. But I think, increasingly, it’s also on us to ask ourselves, “What do you do with the data? And how do you interpret it in an actionable way?” That means you need to turn it into a storyline: be forward-looking and proactive. That also means asking, “What is the important information?” rather than just giving all the information.
We’re increasingly seeing that expand beyond just the financials. I think finance teams are starting to be seen as good custodians of environmental, social and governance (ESG) reporting because of the discipline we already have when it comes to financial reporting. The robustness and the discipline that we have in how we approach data applies, even though some of the things we’re measuring may be relatively new to us.
I’m concerned about the short-termism in business and politics, and the impact it’s having on the rest of the economy and country. Especially when it comes to innovation, infrastructure and ESG topics like sustainability or social impact; these require multi-cycle plans. We can’t solve them over the course of a five-year parliament, and they haven’t been suitably addressed in the past 30 years. We’re suffering as a result — if you look at any kind of national metric over this period, you get the sense we’re at risk of letting things slip through our fingers — as we see metrics like productivity or innovation slip.
In the UK, planning never seems to extend beyond the current electoral cycle, but there are examples in other countries where local authorities are expected to back up their strategies with a plan for delivery that spans decades. We need to be proactive and design our society and businesses to foster innovation.
Businesses shouldn’t be afraid to speak up more. For a long while there had been a prevailing sense that businesses shouldn’t “do politics”; that we shouldn’t speak on behalf of employees who may hold different views, and so on. I get the sense that has begun to change, and businesses are more willing to do things that would previously have been seen as “too political”, especially on topics related to ESG. But it makes sense for businesses to speak out. You’ve got ethical and moral standards, as well as values and principles that you abide by. You have a right to speak out about the issues you are passionate about.
In doing so you can contribute to the conversation and moving the needle, but you also encourage others to speak out, too. It all gets people to stop and think about what they’re doing and its impact in the long term.
I’d like to finally and fundamentally put to bed the moniker of the CFO being the chief bean counter and encourage peers to think of their role in much broader terms. Especially for those rising through the ranks, I would encourage them to see themselves as broader business leaders than purely numeric people, and to take a keen interest in other parts of the business.
For example, when I was CFO at Standard Chartered, many would say that, excluding the CMO, I have as much of an interest in sponsorship and marketing than anyone else in the management team. Why is that? Well, when I was at Vodafone I got to see first-hand the centrality of branded marketing to their success. I saw that it can be really effective when done well, and I’ve taken that learning with me throughout my career.
So, I would encourage my peers to take an interest outside of what is strictly their home territory, as this allows you to come to a more considered view and ultimately add more value to your role.
This interview was conducted by our Director of Think Tank, Scarlett Brown. Interested in furthering the conversation about the changing role of the CFO? Take part in the second phase of our research here.