FDE : All Issues

A financial crisis requires those with financial acumen to lead from the front, and a primary example is Richard Solomons, the new CEO of InterContinental Hotels Group, who explains how he went about making the leap to CEO.

We also feature a supplement devoted to risk management, published in alliance with the Federation of European Risk Management Associations (FERMA). Risk managers are interviewed alongside their CFOs, while Philip Broadley, group finance director of Old Mutual Group, provides additional insight in his capacity as chairman of the pension committee of the 100 Group.

Robert Custers, head of supply chain management and fleet for south-west Europe, and Roland De Coninck, corporate mobility manager, both of Siemens; and Greg Archer, managing director of the Low Carbon Vehicle Partnership (LowCVP) discuss the burgeoning low-carbon and electric vehicle industry.

Another green topic gaining momentum is e-invoicing. We talk to Gianfranco Tabasco, a member of the E-invoicing Multi-stakeholder Forum.

The Hundred Group of Finance Directors is a non-political, not-for-profit organisation that represents the finance directors of the UK’s largest companies, with membership drawn mainly from constituents of the FTSE 100. Andy Halford, CFO of Vodafone, became its chairman in November 2010 – and set out three major areas he wanted to focus on. Firstly, what can it do to help the government with the major challenge of improving the
country’s competitiveness?

In the rebound from the recession we have seen any number of reviews undertaken to analyse what the lessons learnt might be. This is where he considers the second priority area to be; endeavouring to do as much as the group can to ensure that the reaction is proportionate and addresses where the underlying causes lay. The third area where he would like to see it enact real change is slightly more inward facing, namely increasing overall visibility of, and involvement in, the Hundred Group as a whole.

With the increased expansion of international trade, globalisation brings many challenges for today’s CFO. This edition profiles European companies that have been successful in crossing the different global markets in which they operate. We look in detail at how the CFO of Henkel has dealt with the pressure of globalisation, which, along with the financial crisis, is fuelling and accelerating the process of business transformation within the company. The German organisation’s ability to successfully manage global suppliers around the world has been driven by a strong desire to move the company towards a more sustainable position.

We also hear from the CFO of Reckitt Benckiser about how that multinational business, operating in more than 80 countries, is able to take the choice resources, talent and ideas from any of those national markets it operates in, promoting a ‘border-less’ culture where people think and interact in a wider way.

When we recently posed the question ‘can you describe the role of the CFO in just a single word or phrase?’ to our FDE LinkedIn members group we were pretty overwhelmed with the amount of responses that we received.

The story gives a light hearted run-through of the highlights from the answers. The demands that finance professionals now experience have progressed significantly, as the endgame now is about creating value by aligning finance, strategy and operations.

In this edition we also profile two CFOs: RWE’s CFO Rolf Pohlig, who has a keen eye on the figures but also happily embraces the company’s investor ethic, and Erich Hunziker, chief financial and IT Officer of the Roche Group. Hunziker was also very active in the resultant post-acquisition human capital issues, ensuring that Roche retained well over 90% of all the innovators it targeted at Genentech.

Peter Drucker had a motto that "efficiency is about doing things right and effectiveness is about doing the right things". Our interview with Vodafone’s group CFO Andy Halford sums up this theory rather well.

Halford was keen to implement a radical streamlining of Vodafone's cumbersome process network, which meant establishing shared services centres just outside Budapest and in India. It was a huge task but the finance department was at the forefront, showing how nimble a big beast can be when the time is right for change.

Elsewhere in this edition, Darren Shapland of Sainsbury’s tells us what qualities are required to make a good CFO. Two vital aspects, he feels, are keeping the metrics simple and learning when to both trust and distrust information.

We also hear from Italy's Enel, which has made itself one of Europe's biggest but most indebted power utilities. Their CFO, Luigi Ferraris, tells us why investors are keeping the faith.

At a recent conference on 'the future of the financial system', one of the keynote speakers was vice chairman of the International Accounting Standards Board, Tom Jones. Jones gave the IASB's view on the current debate that continues to dog the progress of the regulatory high quality, understandable and international financial reporting standards for general purpose financial statements – or IFRS to you and me.

"If people responsible for the [financial] crisis blame fair value accounting then they are shifting the blame entirely. You can't blame the thermometer because the economy has a fever."

While there is no doubting the feverish condition of the world's economy, many people still question the accuracy of the mercury readings on the 'thermometer' of IFRS. We hear from Feike Brouwers, chief financial officer of ING Direct in the UK, from three UK University professors and senior executives from both the Financial Reporting Council and the Financial

As turnaround stories go, Asea Brown Boverei’s is up there with the best of them. Back in 2002 the Swedish/Swiss engineering giant – otherwise known as ABB – was a punch-drunk lumbering behemoth, very much on the ropes and almost out for the count. Massive internal wranglings coupled with the huge liabilities that the company owed in the US lead to what its current CFO Michel Demaré refers to as a ‘near-death experience’ for ABB.

Elsewhere in this edition we also talk to the BBCs group finance director Zarin Patel, herself also no stranger to organisational change, and hear the views of Sarah-Jane Chilver-Stainer, senior vice president and group treasurer of GSK on the topic of managing financial risk and maintaining ready access to capital markets – something every company needs to keep at the forefront to avoid any near-death experiences.

Mass-market automakers had thin enough margins before the current market downturn as new car sales sink in the face of what Renault CEO Carlos Ghosn has described as "a perfect storm". Renault’s Chief Financial Officer Thierry Moulonguet explains to FDE that it is now most evident that the motor-making businesses that are going to survive best are those that have already put their procurement houses in order. Renault with its tie up with Nissan shares arguably the most
far-reaching global procurement systems and strategies.

Elsewhere in the edition we look at short selling in a financial meltdown and feature exclusive interviews with the CFOs of Laing O’Rourke and Software AG.

M&A – its all about the timing. In an exclusive interview, we speak to Steve Lucas, Finance Director of National Grid, who presided over two acquisitions within a single month last year - snapping up Rhode Island Gas for almost $600m and KeySpan for $12bn.

In the first interview outside of his native Germany, we also learn how Lothar Steinebach, CFO of Henkel KgaA, kept his nerve during the recent €4bn acquisition of ICI subsidiary National Starch. Steinebach is quick to point out that post-merger integration is where the really hard work starts.

We also interview John Hele, CFO, ING Group, on how the bank has re-ordered its management structure in order to better address the new risk climate. Suresh C. Senapaty, EVP, Finance and CFO of Wipro Limited discusses the changing role of the CFO and the finance function, and Roy Waight, EVP for the Finance Functional Plan, Shell, explains the benefits in regional shared service centres.

M&A – its all about the timing. In an exclusive interview, we speak to Steve Lucas, Finance Director of National Grid, who presided over two acquisitions within a single month last year - snapping up Rhode Island Gas for almost $600m and KeySpan for $12bn.

In the first interview outside of his native Germany, we also learn how Lothar Steinebach, CFO of Henkel KgaA, kept his nerve during the recent €4bn acquisition of ICI subsidiary National Starch. Steinebach is quick to point out that post-merger integration is where the really hard work starts.

We also interview John Hele, CFO, ING Group, on how the bank has re-ordered its management structure in order to better address the new risk climate. Suresh C. Senapaty, EVP, Finance and CFO of Wipro Limited discusses the changing role of the CFO and the finance function, and Roy Waight, EVP for the Finance Functional Plan, Shell, explains the benefits in regional shared service centres.

This special anniversary edition contains the usual array of expertise and insight from Europe’s leading CFOs and finance experts as well as an in-depth feature casting an affectionate look back at the last fifteen years in the ever-evolving role of the modern finance director. Elsewhere we have exclusive interviews with thought leaders including Jérôme Contamine, SEVP, Deputy Managing Director, and CFO, Veolia Environnement SA, John Allkins, former Group Finance Director, MyTravel and Robert MacLeod, Group Finance Director, Atkins

Welcome to the latest edition of Finance Director Europe.

Our cover story interview with Nick Luff, the new CFO at utility giant Centrica, reveals a fascinating insight into the sheer energy that he is bringing to the role. It also discloses just how quickly the modern finance director is expected to get up to speed in a new role. By Luff’s own admission his 'feet have hardly touched the ground' since joining Centrica from cruise and ferry line Peninsular P&O in March of this year.

Elsewhere in this edition we hear from Pitney Bowes’ CFO, Bruce Nolop, on the development of a post-SOX risk governance system. A fascinating account of a programme that actually goes far beyond SOX’s mandate. Amongst others, we also hear how Starwood’s CFO for EMEA, Bill Showalter, addresses the various ownership, management and property structures that underpin the effective running of a hotel chain.

Following the publication of Sir David Varney's "2006 Review of Links with Large Business" report, UK Chancellor Gordon Brown embraced HM Revenue & Customs plans to improve its links with large businesses. One of the key contributors to Varney’s review committee was Jonathan Symonds, CFO of AstraZeneca. Our interview with Symonds on this topic highlights the challenges that the European Commission now faces in persuading the member states to agree on a common consolidated
corporate tax base (CCCTB).

Elsewhere in this edition we hear from Gerard Hartsink, Chairman of the European Payments Council, on the challenges European corporates face to realise the Single Euro Payments Area (SEPA). We learn from Zarin Patel, Group Finance Director, BBC, about an exciting new outsourcing agenda at the BBC and, amongst others we also hear from Eldar Sætre, CFO of Statoil on a new approach to budgeting that re-assesses 'what drives good performance'.

For Jean-Michel Etienne, finance director of marketing conglomerate Publicis Groupe, which acquired ad agency Saatchi & Saatchi in 2000 followed by the purchase of US comms major Bcom3 in 2003, the challenges of integrating two of the world's best-known ad agencies into its network has been a tough task.

We also hear how Guy Elliot, finance director of Rio Tinto, faced the enviable task of deciding what to do with net earnings of $5.2bn for 2005. Elsewhere we return to the familiar topic of pensions and corporate liability with Philip Broadley, group financial director at the Prudential and also hear how Ericsson have managed to transform finance and accounting through shared service centres.

Fortis CFO Gilbert Mittler discusses the recent acquisitions of Turkish bank Disbank, Dryden Wealth Management and Von Essen Bank in Germany as well as a more generic growth which Fortis employs with a strong emphasis on cost cutting and cost management. We also return to the familiar topic of private equity investment.

Elsewhere, amongst many others, we hear from David Blackwood, Group Treasurer, ICI plc, on risk and its management from a financial perspective and Prof. Henri Olivier, Secretary General of the European Federation of Accountants (FEE) who discusses new regulation for statutory auditors in the European Union.

We look to the banking industry to assess the prospects for greater deal-making in a period in which there is plenty of cash to do deals, a closer corporate culture among European economies and a will to achieve cross-border deals. We assess two major mould-breaking deals - Spain's Santander acquiring the UK's Abbey in 2004 and Italy's UniCredito buying HVB in 2005 - and discover that there are still plenty of road blocks in place.

Elsewhere we hear from Sir David Tweedie, Chairman of the International Accounting Standards Board on the latest developments in the effort to implement international financial reporting standards and Kate Sharp, CEO of the Factors and Discounters Association on the subject of invoice finance.

Lawrence White, Arthur E Imperatore Professor of Economics at New York University's Stern School of Business explores the what, why and how of gaining a foothold in the US. Professor White outlines some of the obstacles and opportunities that companies keen to establish a presence on US soil should look out for.

Janelle Hill, Vice President of application development and architecture at Gartner sheds some light on the strategic value of BPM while Michael Thrower, Head of European Business Development at Wall Street Systems takes us through the rough terrain that is treasury and payments infrastructure.