Companies are risking their future because they are leaving the development of future senior finance staff to chance, according to a study carried out by Ernst & Young.
E&Y revealed that companies reporting growth in excess of 5% had CFOs at the helm that had been ‘brought up through the ranks’. This did not apply to too many companies, indicating that, if they had internal finance talent development programmes in place, then their growth may well have been better.
A key growth strategy for international businesses is through acquisition and integration – this requires strong finance presence at the top of the organisation. Given the apparent strength of internally grown talent, then this may present problems down the line.
The study highlighted a number of areas that future CFOs need to develop, the main ones being:
• experience across different sectors and divisions;
• experience of shared service centre implementation; and
• international experience.
Les Clifford, chair of the Ernst & Young CFO programme in the UK and Ireland, said: “Since the 2008 financial crisis, the role of the finance function in guiding company growth and strategy has increased dramatically to meet challenges such as increasing volatility, regulatory change, globalisation and the rise of emerging markets. Organisations risk jeopardising their future growth prospects if the development of the CFO is left to chance”.
Too many large companies are leaving the acquisition of top finance people either to chance or to the expense and trouble of extensive recruitment or headhunting campaigns. Interestingly, the main single reason for this is that incumbents are too busy to coach and develop talent.
Consult.Autus can provide assistance either directly with training and coaching schemes, or indirectly through project work and/or ‘day job’ backfilling, to enable resource to be freed up.