Sarah Pollard is CFO at PZ Cussons plc. She was previously Group Finance Director at Nomad Foods, and has held senior roles at Diageo, Tesco, and Unilever. Here she shares her thoughts on how CFOs can use their unique position to ensure businesses have a positive social impact, the importance of having the right investors, and how we tackle the right data.
How do you define and measure success so that leaders can plan for the long term?
As we aren’t a US-listed business, we don’t formally report quarterly. Of course, there is always a desire to do better than you did last quarter, but we don’t have the same overwhelming pressure to pursue very short-term results. We take a longer-term planning horizon, and our senior management has long-term incentives. We never want to mortgage the future health of the business, or our long-term impact on the communities in which we operate, with very short-term decisions.
This is tied to our strategy and impacts the way we define and measure success. Each strategic imperative is accompanied by KPIs. They include earnings per share — of course, shareholder return is important — as well as revenue growth, to tell us if our brands are resonating with our consumers. The other 20% of our KPIs are related to sustainability goals. These include social as well as environmental targets. We try to define our success as holistically as we can and make any appropriate trade-offs along the way.
What social or economic issues keep you awake at night?
I worry about the pressure on young people to perform at an increasingly high level. I’ve seen this with my own children — one starting university and the other beginning senior school — and also as a business leader looking through young people’s CVs and wondering how they’ve managed to accomplish so much. We need to consider the impact that this pressure can have on their mental health — especially alongside other well-being risks, such as financial concerns or the impact of social media.
Another concern is of course living through a time of huge geo-political change. When you think about Brexit, COVID, the war in Ukraine, any one of those things could have destabilised us all, and we’ve somehow navigated them in quick succession. As a global society, we’re still learning.
Is there anything businesses can do to address these challenges?
Firstly, it’s important that business has a voice and we’re not afraid to have a point of view. One of the risks for any leader is to only think about doing a great job during your tenure, and not having an eye on those that will follow you. It’s important to leave a legacy that takes a long-term view, able to look back and look forward and see that, despite all the turmoil, we’ve juggled different priorities and delivered for all of our very diverse set of stakeholders.
In my career, I’ve had the privilege of working in companies that have been successful whilst doing the right thing. In my experience, the desire in business to do good is a complement to superior financial returns not an impediment to it. I always try to lead with that same ethos and surround myself with people who feel the same way.
Taking on this longer-term horizon, I’ve found it useful to plan for a wide range of scenarios as this helps to get a clear picture of how we can manage our cost base in different scenarios to ensure that we can still serve consumers whilst delivering appropriate returns to shareholders despite economic uncertainty. I would also add that, inevitably, this uncertainty is married to increased pressure to manage and justify spending. When this is something we’re facing, I urge us to always stay true to our purpose and values, and be aware of our responsibility in being a business committed to making a meaningful and positive contribution to our communities and stakeholders.
What’s uniquely within the gift of the CFO? Where do you think they can make the most impact?
One of the most important things I can do is to lead my function well and be seen in the business as a leader that prioritises the welfare and development of my team, just as much as achieving financial or business objectives.
Ultimately, as the leader of our strategic planning and budgeting processes, I have the privilege — and responsibility — of determining what is the right level of growth ambition and how we are going to fund it. A CFO has a unique vantage point from which to assess the trade-off between growth investments and profitability.
I also sit on our Board ESG committee, on which I use my voice to be as loud on topics relating to sustainability as I am on financial performance. Although that’s a personal choice, I think that every Director can and should contribute beyond their specific functional specialism to make an impact on other areas that they are passionate about or interested in.
What are the barriers to us doing more?
Who your investors and shareholders are can make a real difference. In our business, we have long-term investors and a full operational licence to run the business in the best interest of all stakeholders, and to balance the short and long term. We engage frequently and transparently with investors and are really clear about why we’re doing what we’re doing. In listed companies, you have the advantage that no single investor has a disproportionate voice.
Access to perfect data is a challenge for any business. For example, we want to make sure we’re a diverse and inclusive workforce, but we can’t easily access some of the data points that you’d expect and that you’d want at your fingertips to see where our gaps are, and to inform where we want to go. Sustainability can be a challenge, because if you ask ten people what’s most important in sustainability, you’ll probably get 25 different answers. So it’s not just a question of capturing data but it’s knowing what your destination is, and being really clear on which KPIs you’re going to prioritise. We’ve set becoming a B Corp as a bold ambition for the business, because that’s very deliberately a holistic measure of our environmental sustainability, societal impact, and employee wellbeing — but there are other science-based targets we’re prioritising too. Whereas in financial performance, even when they are not necessarily always easy to achieve, it’s easy to define the KPIs that represent success. In any sustainability agenda, that’s slightly less clear. PZ Cussons is up for the challenge!
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