Taking care of business

THE HOLIDAYS are nearly upon us and there is a palpable sense of relief they might bring some respite. Wouldn’t it be good to have a calm Christmas in which the cares of the world were kept at bay? Not likely. Those of you with a December year end will face the stresses peculiar to that period, while others will be braced for the bad news that always seems to blight Christmas.

But what have we learned from this year and what will our minds turn to as we pack the dishwasher after Christmas lunch? Earlier in the year it became clear that the advisory firms were making their money from helping companies make acquisitions overseas. Those who did continued to report positive numbers. But with growth difficult based on UK trading only, what do you do? Well, it seems clear that the eurozone might be difficult too. Everyone is worried about a dip into recession, so it seems overseas growth will have to be achieved elsewhere.

But perhaps, as an FD, you’re concerned about your next career move. This looks like it was the year in which it became obvious that the FD’s position is a useful staging post for moving to the chairman’s seat or even the chief executive’s office. That trend could continue into next year as boards remain concerned with financial control and caution in the face of economic uncertainty.

When it comes to being CEO, it may well be that the premium is placed on being able to handle financial engineering and structures, rather than entrepreneurial flare. There is another factor that supports the case – the FD does more than just keep count. This is an old story, but there is now solid evidence that top FDs use financial expertise to inform strategic decision making. They are a business partner. The question I keep asking myself is not, what does the FD do, but what are CEOs for?

That’s a question we asked when Steve Jobs stepped down from running Apple shortly before passing away earlier this year. CEOs are often viewed as the product people, blessed with insight about what the customer wants – they’re the vision people. But I’m increasingly convinced this can be learned or you can hire people to do that kind of thinking for you. The key thing for the leader is that they can bring about an environment in which business creativity flourishes. That’s about understanding the business drivers like they were second nature. FDs with flexible minds can do that.

There’s something else that supports this hypothesis. The other thing that will be high on the agenda of investors and chairmen in 2012 is reputation. In the midst of all these economic travails, reputation is everything. So who better to take care of that? Yes, the FD. They know the risks. And 2012 is looking like a risky year.

Gavin Hinks, Editor