Finance forteThe future of
2011
B Document title
Group CFO, Reed Elsevier
Managing Director of Finance, Pernod-Ricard
CFO, Friends Provident
CFO, Financial Times Group
Group CFO, UBS
Former CFO, Dana Gas and Non Executive Director, East West Petroleum Corporation
Group CFO, Telefónica
Senior Vice President, Global Head of HR for Finance and Administration, SAP
Group CFO, Unilever
CFO, PKN Orlen
Professor of International Management
Management
Director-General of Financial and
Managing Director, Russell Reynolds Associates
Executive Vice-President for Finance, Larsen & Toubro Ltd
Group CFO, Amer Sports
CFO, DTEK
Group CFO, Softline
1Finance forte
Finance forte
——
Executive summary 02
The future of the top job 06
Preparing tomorrow’s leaders 08
1.
2.
4. 11
12
Get international exposure 12
14
14
Building the talent pipeline 16
Talent development is a measure of individual CFO performance
Survey demographics 22
The component p arts of the CFO’s role 24
Career paths of the EMEIA top 100 Center pages
The DNA of the CFO,1
Finance forte
Executive summary
72%agree that the role’s
make it a more attractive aspiration 73%
believe that very few people in their organization have the broad skills required to be Group CFO
66%of respondents believe the title “CFO” is inadequate
1 .
Finance forte 2
Finance forte
67%believe that CFO candidates who have
function are at a disadvantage to those with direct commercial experience
58%believe that the increasing breadth of the role will lead to the appointment of more deputy CFOs
71% of CFOs would like to improve their talent development skills
A complex environment calls for a multi-faceted CFO
Structural change can limit opportunities for candidates to develop the right credentials
Finance transformation initiatives are impacting the long-term talent pipeline
service center is increasingly becoming a core competence for
Nine steps to preparing for the Group CFO role
contenders
and experience needed to lead diverse teams, to give commercial
contenders apart.
Gaining direct commercial experience can be the biggest challenge
CFOs play a crucial role in talent development, but need to do more
Organizations must build a bridge to the Group CFO position
planning and talent development processes in order to cultivate a
Finance forte 4
problems get to the CFO’s desk, they are inherently — otherwise they would have been
that the scope of responsibilities held by the CFO
is increasingly the public face of the organization
organizations look ahead to an uncertain future, the
leaders will respond to the evolving external
implementation of these initiatives will become
The title no longer does the role justice
Finance forte 6
Professor of International Management Development,
7Finance forte
continues to cause unpredictable demand, capital availability and
Management.
Structural change can limit opportunities for candidates to develop the right credentials
The DNA of the CFO2
Figure 1: In three years’ time, what change do you expect to the importance of the following skills and capabilities as part of the Group CFO role?
Figure 2: Percentage of respondents who either strongly agree or agree with these statements
Strongly agree Agree
2
Important
As the Group CFO position evolves, those in the role face the challenge of ensuring they have the right portfolio of talent beneath them, and those who aspire to the role face a daunting task of building the skills and experience that will enable them to move
stakeholders, gain broad commercial and strategic experience and learn how to build and lead diverse teams of specialists from across the full spectrum
controller or head of treasury role, moving into the
Diversity is more important than vertical focus
candidates must gain exposure to a broad range of different roles
Caroline Raggett, a Managing Director at Russell Reynolds
According to survey respondents, it is most important for
commercial and strategic experience, often in divisional or
leading transactions, negotiating deals, delivering tangible successes
8 Finance forte
9Finance forte
onsi er the option of temporarily steppin out of nance
Figure 3: How important is it for future Group CFOs to have experience in the following areas? Select up to three
42
22
discipline, from treasury to tax and
A Managing Director, Russell Reynolds Associates
The best stepping stones to the top job
Finance forte 9
Figure 4: Percentage of respondents who either strongly agree or agree with these statements
Get post- as well as pre-deal exposure
Friends Provident.
Strongly agree Agree
Finance forte 10
activities or initiatives in your career?
traditional skillsraditional nance s ills remain critical ut will not
differentiate
11
42 41
44
42 42
41 22
41
12
44 21
41
44 11
Strategy development
14
21
Supporting role None
Supporting role None
Finance forte 11
uild teams with diverse s ills
accounting, audit, compliance, IT, sourcing, strategic planning, M&A, resource allocation, etc are all very important elements of a
n understandin of emer in mar et dynamics is important
for Group CFOs to gain experience and an understanding of different international business environments.
continues Mr. Leisy.
Finance forte 12
Group CFO, Unilever
initiativesGet exposure to the full ran e of nance activities as well as i project experience
and regions.
Paul Wood, EMEIA Finance Leader, Performance Improvement at Ernst & Young.
Finance forte
ommunication and networ in s ills will distin uish the top contenders
The DNA of the CFO,
4
Group CFOs barely register it as a factor for consideration
Figure 6: Developing skills and experience
your direct reports their
Question asked of non-Group CFOs:you your
Find the project to give you access
3
4
41
24
21
24
22
21
14
4
21
Finance forte 14
To provide a context for our study into the future requirements for the CFO role, we analyzed the career paths of the current crop of Group CFOs at the top 100 EMEIA companies in the Fortune 5005 to see what we could learn from the routes they had taken. While not mutually exclusive, we found that there were
specialism.
5
Stepping stonesWhere did they come from?
Career paths of the EMEIA top 100
Vice President/Managing Director/Management
Board Member/Deputy CEO
CEO/Chairman/Partner
CFO of a smaller division/regionaldivision at same or another company
Deputy CFO at same/another company
CFO at a different company
Head of operations-orientateddivisions (e.g., corporate
strategy, corporate governance)
Head of other nance-oriented divisions
CEOs of other divisions
10%
8%
12%
6%
13%
24%
26%
1%
GroupCFO
From within the same company
57%
From a different company
43%
i
Career paths of the EMEIA top 100 (continued)
Route to the top
MBA34%
Accountant22%
MBA and Accountant
3%
PhD15%
Other26%
37%Finance role
63%
Held positions in one country
52%
Held positions in more than one country
48%
Same sector30%
Changed sector70%
Hired from within57%
External hire43%
Group CFO
position
Sector movement
International experience
Education
stereotype that all CFOs are accountants. Only 22% of the
very early in their career.
Education
Finance forte ii
The accountant CFO
CFO of GlaxoSmithKline
Julian Heslop
CFO of Eni Group
Alessandro Bernini
CFO of TNK — BP
Jonathan William Muir
CFO of Credit Suisse
The accountant
CFO
1977 – Accountant, John M Winter
1979
1986
Controller, Grand Metropolitan
1998 – Financial Controller, Glaxo Wellcome
2001 – Senior Vice President, Operations Controller, GlaxoSmithKline
2008 – CFO, Eni
2009 – CFO, TNK — BP
2008
2003 – Vice President, Finance and Control, TNK — BP
2000 – CFO, Sidanco
1985 – Trainee Accountant
2004 – CFO, Credit Suisse
2002 – CEO, Diethelm Keller Gruppe
1997 – CFO, ABB
1990 – Head of Corporate Staff and Audit, ABB
1984 – Internal Auditor,
1988 – Head of Internal Audit,
1982
1979Institute, University of Zurich
2006 – CFO, Saipem
1996 – Administration
Saipem division, Eni
1995
1981
1979 – Junior Accountant,
Neutra Revisioni
2005 – CFO, GlaxoSmithKline
1978 – Auditor, Stoy Hayward
CFO of ING Group
Patrick Flynn2009 – CFO, ING
2007 – CFO,
2002 – CFO, HSBC South America
1999 – Head of International Finance Control, HSBC
1989Treasury, Finance and Control roles, HSBC
1995 – Senior
Finance, HSBC
1984 – Accountant, KPMG
all who have followed a similar path.
Finance forte iii
Career paths of the EMEIA top 100 (continued)
The MBA CFO
CFO of Deutsche Lufthansa
Stephan Gemkow
CFO of Total
Chevardière
CFO of ThyssenKrupp
Dr Alan Hippe
CFO of Banco Santander José Antonio
Alvarez
CFO of Unilever
Jean-Marc Huët
The MBA CFO
International and non-
industry
Finance, operations and international
experience in same company
Finance experience across different industries in same country
Finance and international experience in same industry
Finance and international
experience in different industries
1988 Consultant, BDO Deutsche Warentreuhand AG
2008 – Vice Chairman of Executive Board, Continental AG
2009 – CFO, ThyssenKrupp
2002 Executive Board and CFO, Continental AG
1998 – Senior Vice President of Control,
Fraport AG
1996 – Head of Group Control and IT,
1993 – Research Assistant, University of Mainz, and
University of Mainheim
1990 Development Executive,
1994
1997 – Head of Investor Relations,
2001 – Senior Vice President for Corporate
2004
2006
2004 – CFO, Banco Santander
2008 New York
2010 – CFO, Unilever
2003 – CFO, Royal Numico N.V., Amsterdam
1999 – Executive Director, Investment
1991
2003 – Deputy CFO, Total Group
2008 – CFO, Total
2000
1995 – Vice-President, Operations
1989 Division, Total
1982 Exploration and Production, Total
1984 – Analyst, Instituto Nacional de Industria
1987 – Research Department, Banco de Crédito Industrial
1990 – Vice President, Finanpostal Gestión Fondos de Inversión y Pensiones
1993 – CFO, Banco Hipotecario SA
1995 – Financial Director, Corporación Bancaria de España SA
1999 –
2002 – Head of Financial
1993 Goldman Sachs
Finance forte iv
Neither accountant, nor MBA CFO
CFO of Volkswagen
Hans Dieter Pötsch
CFO of Allianz Dr Paul
Achleitner
CFO of Statoil
Eldar Saetre
CFO of Societe
Generale Didier Valet
CFO of RenaultDominique Thormann
Diverse beginnings
University of Darmstadt, Germany
2007 – CFO, Statoil
2004 – Head of
and Control, Statoil
2003 - Executive Vice President and
1998 – Senior Vice President for Corporate
1989 – Commercial
1980 – Joins Statoil
1985 – Controller,
Gullfaks operations
1979
1987
1991 – Chairman of the Board,
1995 – Chairman of the Board, Dürr AG
2003 – CFO,
2008 – CFO, Societe Generale
1992 – Analyst, Banque Indosuez
2010 – CFO, Renault
2009 – CEO and Chairman, RCI Banque
2004 – Senior Vice President of Administration and Finance,
Nissan Europe
2002 Communications and Investor
Relations, Nissan
1989 – International Treasurer, Renault Credit International
1999Investor Relations and Financial
1979 – Credit Analyst, Treasury Department, Chase Manhattan Bank,
New York
– BA international relations, John Hopkins University
2000 – CFO, Allianz
1994 – Partner, Goldman Sachs
1989 – Executive Director,
Goldman Sachs
1984 Bain & Co.
1988 and Acquisitions,
Goldman Sachs
– Doctorate, University of St Gallen, Switzerland
– Graduate,
School of Economics
1992 –
exploration and production division
– Graduate, Ecole Polytechnique and the Ecole Nationale
2000
2003 – Group Head of Investor Relations, Societe Generale
2007
1996 – Equity Research Analyst, Dresdner Kleinwort Benson 1994 – Head of Investor Relations,
Renault
Finance forte v
Career paths of the EMEIA top 100 (continued)
industries.
proportion of their revenues and
international experience will
part of the Group CFO role. The
those with more traditional, developed market experience.
International experience
The international CFO
CFO of Saint Gobain
CFO of Unilever
Jean-Marc Huët
CFO of Siemens Joe Kaeser
CFO of Royal Dutch
ShellSimon Henry
CFO of Nokia
Timo Ihamuotila
The international
CFO
1996
Central Africa Unit, French Treasury
1999 – Technical Advisor, Ministry of
2002
2004
2007 – Vice President of Corporate
2009
2009 – CFO, Shell
2001 – Head of Group Investor Relations, Shell
1989 – 2001
1982
2009 – CFO, Nokia
2008 – Executive Vice President, Sales, Markets, Nokia
2007 – Executive Vice President,
2004 – Senior Vice President, CDMA
1999 – Director of Corporate Finance, Nokia Corporation
2000 – Vice President, Finance, Corporate Treasurer, Nokia
1996 – Vice President, Nordic
1993
1990
2010 – CFO, Unilever
2008 – CFO, Bristol-Myers
2003 – CFO, Royal Numico N.V., Amsterdam
1991
1999 – Executive Director, Investment
2006 – CFO, Siemens
2004 – Chief
Siemens
1999 – Corporate Finance,
and Taxes, Siemens
1995 – CFO, Siemens Microelectronics Inc., San José, California
1987 – Head of Business Administration Projects, Siemens Semiconductors Malaysia
1988 – Head of Business Administration, Siemens Semiconductors
1980 – 1988 Joined Siemens AG,
of Business Administration, Discrete Components
Semiconductor Plant,
Siemens
2004 – CFO, Exploration and Production, Shell
1993 Goldman Sachs
Finance forte vi
this population who have stayed in the same industry since the start of their career and those
one-third to two-thirds. The
to move from one sector to another will vary from industry
common for CFOs in heavily
recruited from outside the sector.
Sector experience
The sector specialist CFO
CFO of EADS CFO of Nestlé
Royal Ahold
CFO of Intesa Sanpaolo
Carlo Messina
CFO of GasTerra
Maarten Blacquière
The sector
specialist CFO
1987MBB
1977
2007 — CFO, Royal Ahold
2007 – Deputy CFO, Royal Ahold
2002 — Senior Vice President and Chief Tax and Treasury
Ahold
2001 – Assistant Treasurer, Royal Ahold
1992 – Internal Auditor, Anchor Glass
1996 — Director, Corporate Finance, Joseph E.
1990Divisions, Deutsche Aerospace AG (Dasa), an EADS predecessor company
1992
1996
2002 – CFO, EADS
2007 – 2008 – Held additional
2008 – CFO, Intesa Sanpaolo
1995 – 2008
Creation Governance, Intesa Sanpaolo
1990 – Head of Corporate Finance,
1987
2006 – CFO, GasTerra
2005 – Deputy CFO, GasTerra
2003 – European Financial
1989
2000 – Senior Vice President, Acquisitions and Business
Development, Nestlé
2008 – CFO, Nestlé
1995 – Executive Vice President and CFO, Nestlé Canada
1984 – Director of Finance, FoodService, Nestlé Canada
1988 – Vice President Finance and Treasurer, Nestlé Canada
1993 – Senior Vice President, Finance, Nestlé Canada
1977 – Financial Analyst, Nestlé Canada
1980
2001 — Senior
Finance forte vii
The multiple sector CFO
Career paths of the EMEIA top 100 (continued)
CFO of Centrica
CFO of OMV GroupDavid C Davies
CFO of METRO AG
Olaf Koch
CFO of Roche
Eric Hunziker
CFO of Philips
Pierre-Jean
The multiple sector CFO
1987 – Trainee Accountant, KPMG
2002 – Vice President,
Mercedes Car Group, DaimlerChrysler
1988Director, Corporate
Vice President, Corporate e-Business, DaimlerChrysler
1994 –
Finance Process and Systems, DaimlerBenz
1996 – Founder and CEO, IT-Networks
1991
1999 – Finance Director/CFO, P&O Princess Cruises
2003 – CFO, Peninsular and Oriental
2007 – CFO, Centrica
2001 – CFO, Roche
2000 – CEO, Diethelm Keller Group
1998 – CEO, Diethelm Group
1997
1988
1983
1980
1978 – Head of Assistants, Institute of
2005 – CFO, Philips
2001 – CFO, Faurecia
1982 – 2001 – Financial Controller,
New York
1978 – 1982Auditor, Peat Marwick Mitchell
2000
2002 – CFO, OMV
1997 - Financial Director,
1988 – Commercial Head, New Retail
Europe Division, Grand Metropolitan
1994 – Financial Director, International Distillers and
1994 – Financial and Business
Walt Disney
1978 – Trainee Accountant,
Accountant, PwC, Milan
1983 – Internal Auditor, BOC
Chemicals and Healthcare
2007Operations, Permira
2009 – CFO, Metro
Finance forte viii
An important personal reason for aspiring CFOs to build
involved in the CFO succession planning process in your organization?
21
Group CFO, UBS
Group CFOs compared with non-Group CFOs
Finance forte
At a time when the importance of the role has never been greater, the focus on cultivating the pipeline
Figure 8: Percentage of respondents who either strongly agree or agree with these statements
talent development.
Strongly agree Agree
42
24
Finance forte 16
Executive Vice-President for Finance, Larsen & Toubro Ltd
to talent management
Yet, only a minority of companies currently adopts a formal
CFO succession planning process in your organization?
12
11
view of the role of the CFO in succession planning?
decrease in revenue.
exposure to a range of initiatives, including M&A, IPOs and
experience.
Companies with a revenue increase of at least 5% over the last 12 months compared with those with no change or a decrease
Finance forte 17
Talent development is a measure of individual CFO performance
Figure 11: To what extent is talent development within the
1
High potential programs need to be active and
Finance forte 18
Larger companies compared with small and medium-sized companies
clear deputy CFO compared to medium or small companies.
action from a talent management perspective, and evaluate people
There is a correlation between strong performance and internal recruitment
Of course in some circumstances, it may be preferable to recruit an
development process.
CFO, Financial Times Group
Finance forte 19
20
plans and recruit executives internally tend to perform better as a
promoting internal talent.
2
1
2
2
2
2
1
1
Finance forte
21Finance forte
41
21
Group CFO, Softline
Fast growing markets compared with mature markets
22 Finance forte
Job title
14
4
MBA
24
1
Organization ownership and revenue
14
14
1
21
22
4
Shown: percentage of respondents
1
22
1
1
Finance forte
How has your organization’s revenue changed over the past 12 months?
—12
22
22
Country and sector
In which country are you personally located?
4
4
4
4
4
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
2
2
2
The
24 Finance forte
Leading key initiatives in finance that support overall strategic goals
Ensuring businessdecisions are groundedin sound financial criteria
Representingthe organization’s progress on strategic goals to externalstakeholders
Providing insightand analysis to support CEO and other senior managers
Developing and defining the overall strategyfor your organization
Funding, enablingand executingstrategy set by CEO
The CFO’s contribution
1
2
34
5
6
EX
EC
UT
I ON
E N A B L E M E N T
DE
VE
LO
PM
E N T
Communica
tion to the external
marketplace
Trusting the numbers
Providinginsight
Getting your house inorder
Funding organizational strategy
Deve
lopm
ento
fbus
ines
sst
rate
gy
Finance forte
Core skills Core knowledge
business
business propositions
proposals
Key experiences Key relationships
Business case appraisal
Cost managementPlanning and forecasting Finance business partners
Audit Committee
Representingthe company’s progress on strategic progress to externalstakeholders
6
Communicatio
n to the external
marketplace
Developing and defining the overall strategyfor your company
5
Deve
lopm
ento
fbus
ines
sst
rate
gy
Funding, enablingand executingstrategy set by CEO
4
Funding organizational strategy
3
Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
2
Providing insight and analysis to support CEO and other senior managers
Providinginsight
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Core skills Core knowledge
past performanceBusiness performance management
Key experiences Key relationships
Financial planning and reporting
non-recurring initiatives
performanceExperience of identifying issues and corrective actionsOperating at Executive level
Finance business partnersStrategy Director
2Providing insightand analysis to support CEO and other senior managers
Providinginsight
Representingthe company’s progress on strategic progress to externalstakeholders
6
Communica
tion to the external
marketplace
Developing and defining the overall strategyfor your company
5
Dev
elop
men
tofb
usin
ess
stra
tegy
Funding, enablingand executingstrategy set by CEO
4
Funding organizational strategy
3
Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Core skills Core knowledge
function
interdependencies
Key experiences Key relationships
Finance process improvement
transformation
Operations, HR
Representingthe company’s progress on strategic progress to externalstakeholders
6
Communicatio
n to the external
marketplace
Developing and defining the overall strategyfor your company
5
Deve
lopm
ento
fbus
ines
sst
rate
gy
Funding, enablingand executingstrategy set by CEO
4
Funding organizational strategy 3Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
2
Providing insight and analysis to support CEO and other senior managers
Providinginsight
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Finance forte 26
Core skills Core knowledge
Turning strategic plans into operational plans and targets
Monitoring progress against strategy
Capital management
Strategic and operational planningPerformance management systemsProgram management
Key experiences Key relationships
Developing strategic plans
Operations DirectorExternal funding providersKey investorsTreasurer
Representingthe company’s progress on strategic progress to externalstakeholders
6
Communica
tion to the external
marketplace
Developing and defining the overall strategyfor your company
5
Deve
lopm
ento
fbus
ines
sst
rate
gy
Funding, enablingand executingstrategy set by CEOFunding organizational strategy
43
Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
2
Providing insight and analysis to support CEO and other senior managers
Providinginsight
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Core skills Core knowledge
Translating corporate goals into a clear strategy
corporate strategy
constraints
conceptually strong
motivate people
C-suite colleagues
Strategic and operational planning
Business model designScenario planning
Key experiences Key relationships
Strategy developmentDevelopment and implementation of business plans
HR DirectorStrategy Director
Representingthe company’s progress on strategic progress to externalstakeholders
6
Communica
tion to the external
marketplace
Developing and defining the overall strategyfor your organi ation
5
Dev
elop
men
tofb
usin
ess
stra
tegy
Funding, enablingand executingstrategy set by CEO
4
Funding organizational strategy
3
Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
2
Providing insight and analysis to support CEO and other senior managers
Providinginsight
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Core skills Core knowledge
Clear communication of performance
main competitors
analysts and investor communityResponding positively to issues raised by industry regulators
Statements
Key experiences Key relationships
Executive and non-executive boards
remunerationExternal auditorsMedia and Investor RelationsRegulators
Representingthe organi ation’s progress on strategic goals to externalstakeholders
6
Communication to the external
marketplace
Developing and defining the overall strategyfor your company
5
Deve
lopm
ento
fbus
ines
sst
rate
gy
Funding, enablingand executingstrategy set by CEO
4
Funding organizational strategy
3
Leading key initiatives in finance that support overall strategic goals
Getting your house inord
er
2
Providing insight and analysis to support CEO and other senior managers
Providinginsight
Trusting the numbers
1
Ensuring businessdecisions are groundedin sound financial criteria
Finance forte 27
xxxxx xxxxxxxxxxxxxx xx xxxxx xx xxx
Finance forte
Les CliffordPartner, Ernst & Young LLP
Emma DowdingDirector, CFO program EMEIA,
Ernst & Young LLP
Alain PerrouxPartner, GIE Ernst & Young
Ernst & Young
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