Wickland Westcott

Finance Directors Need Chameleon Skills

Jobless figures have charted the uncomfortable and damaging course of recession at employee level. The casualty rate in the executive suite is more difficult to identify, but it has been extensive. "In the boardrooms it has been more savage and deeper than we have ever experienced," said Mike Spurr, a management recruitment consultant with the experience of two recessions behind him.

Scores of directors and non-executive directors have paid the price for the slump in business and profits and the need to cut costs. The appointment of a new chief executive has also had a knock-on effect with the early departure of many finance directors.

Spurr, a senior consultant with Wickland Westcott, estimates the arrival of a new chief executive has resulted in the money men leaving within a year in 80% of cases. He believes the change reflects the critical nature of the working relationship between the two top executives and the need to have "absolute trust and confidence in the stewardship of the finance function". The recession groundswell coupled with the outcry about bank salaries and bonuses and executive responsibility is influencing other changes in corporate behaviour. The appointment of non-executive directors is being subjected to much closer scrutiny, while new remuneration schemes and incentives are taking more time to get boardroom approval.

Spurr said: "There doesn't seem to be much difference between the processes of appointing an executive or non-executive director to the board. The brief for a non-executive is now almost the same as the one for a permanent director to minimise risk." He takes the long rather than short-term approach to gauging the length and impact of recession: "I've been through two recessions before and they've both stretched over three years. It takes a year going into recession, then 18 months on the bottom and another year coming out the other side." Spurr is targeting the first quarter next year for a pickup in recruitment and had been anticipating stronger signs of improvement in the current quarter but the election has produced a pause and a "let's wait and see" response from a number of businesses in the market to fill key vacancies.

Recession has been more difficult to handle for businesses with young boards who have experienced nothing but growth and has emphasised the need for strong leadership. Spurr recalls one experienced chairman telling him two years ago that he had been asked by a young member of his board: "Will it be over by the end of summer?"

The recession cycle has given the finance job the characteristics of a chameleon. "At different points in the cycle people want different things from finance directors," says Spurr. "In the early stages the emphasis is on cost-cutting, bean-counting and someone who is red hot on numbers. Now the need is for a more commercially-oriented finance director."

Executive boundaries have changed with finance chiefs finding it easier to make the transition to chief executive or take on the role of chief operating officer. The upshot is that head hunters are finding it more difficult to persuade them to fly the nest.

"Persuading potential candidates even to discuss the possibility of a move has been difficult," says Spurr. "Successful finance directors are well looked after. They understand the potential, challenges and risks to their business and know where the bodies are buried."

"They are rarely motivated to move for positive or 'pull' reasons such as increased responsibility or higher pay. Some finance directors really love numbers and don't want to become generalists."

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