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$Page 1: Finance forte - qtxasset.com · Finance forte L`] ^mlmj] g^ ÕfYf[] d]Y\]jk`ah+ 67%believe that CFO candidates who have kh]fl l`]aj ]flaj] [Yj]]j af l`] ÔfYf[] function are at a$
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

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——

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

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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 .

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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

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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

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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

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Get post- as well as pre-deal exposure

Friends Provident.


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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

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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.

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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.

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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

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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.

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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


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


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


talent development.


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


4


3


Getting your house inord

er

2

Providing insight and analysis to support CEO and other senior managers

Providinginsight


1



past performanceBusiness performance management


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


6

Communica


marketplace


5

Dev

elop

men

tofb

usin

ess

stra

tegy


4


3



er


1



function

interdependencies


Finance process improvement

transformation

Operations, HR


6

Communicatio

n to the external

marketplace


5

Deve

lopm

ento

fbus

ines

sst

rate

gy


4

Funding organizational strategy 3Leading key initiatives in finance that support overall strategic goals


er

2


Providinginsight


1


Finance forte 26


Turning strategic plans into operational plans and targets

Monitoring progress against strategy

Capital management

Strategic and operational planningPerformance management systemsProgram management


Developing strategic plans

Operations DirectorExternal funding providersKey investorsTreasurer


6

Communica


marketplace


5

Deve

lopm

ento

fbus

ines

sst

rate

gy

Funding, enablingand executingstrategy set by CEOFunding organizational strategy

43



er

2


Providinginsight


1



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


Strategy developmentDevelopment and implementation of business plans

HR DirectorStrategy Director


6

Communica


marketplace

Developing and defining the overall strategyfor your organi ation

5

Dev

elop

men

tofb

usin

ess

stra

tegy


4


3



er

2


Providinginsight


1



Clear communication of performance

main competitors

analysts and investor communityResponding positively to issues raised by industry regulators

Statements


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


5

Deve

lopm

ento

fbus

ines

sst

rate

gy


4


3



er

2


Providinginsight


1


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

Assurance | Tax | Transactions | Advisory

Ernst & Young is a global leader in assurance, tax,

potential.

of member firms of Ernst & Young Global

Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our

any responsibility for loss occasioned to any person acting

Documents

Finance forte - qtxasset.com · Finance forte L`] ^mlmj] g^ ÕfYf[] d]Y\]jk`ah+ 67%believe that CFO candidates who have kh]fl l`]aj ]flaj] [Yj]]j af l`] ÔfYf[] function are at a