So long to silos

You thought being a CFO was all about finance but think again. Research out this week from the CFO Centre finds that 60% of CFOs are leading other departments like recruitment, marketing and people management.

Sara Daw, CEO of The CFO Centre, a provider of ‘fractional’ CFOs, says: “The era of the siloed CFO is over; the age of the strategic CFO has arrived.”

To be honest, yours truly has been hearing about the strategic CFO since 1999 but, you know, it was always a slow moving change. Anyway, breaking out of the CFO silo sounds fun. Though a quarter of the finance chiefs polled said they hadn’t had the training needed to lead in other disciplines. So, a lot of painful highly frustrating fun then.

‘Right pay for the right job’

Over to the Financial Reporting Council (FRC) and their latest podcast, this time on executive pay. The wads paid out to CEOs are a never ending source of headlines and governance gnarliness.

Anyway, the FRC experts chewed the fat on pay and tackled the issue of whether UK pay should be like US pay levels, a development many City folk would like to see.

But Maureen Beresford, director of corporate governance and stewardship at the FRC, had this heads-up for remcos: “It’s very easy to say, ‘Oh, it should be aligned with the US to get the talent in our company’.

“I think we just have to remember that it’s not always that straightforward. The US has huge companies and very different capital for these companies and I think it is more down to what is the right pay for the right job in a particular market.” Better hold that offer on the holiday home in Antibes.

 

Sign up, sign up!

Speaking of pay, this week sees the launch of a UK campaign to introduce a maximum pay ratio of 10:1 for CEO to worker pay.

The petition comes from a think tank, The High Pay Centre, and the Equality Trust, and follows figures showing median CEO pay in the FTSE 100 — £4.58m and 122 times the median UK worker’s pay — has now gone through three consecutive years of record rises.

The High Pay Centre says: “Polling we conducted with Survation shows that this proposal is supported by a clear majority of the public. We believe that building visible public backing is essential if we are to shift the debate around fair pay and inequality.”

 

Risky politics

Given the less than orthodox mode of governing over in the US, there’s been much discussion of the way business will deal with political uncertainty.

Research by boffins over in US universities say their research reveals an increase in political risk makes companies more likely to recruit “politically connected individuals” and results in changes to board structure. This helps ease the burden of making investments. Though the structural changes reduce board monitoring.

So, in short, business may weather the political storms better, but at the cost of good governance. We’re not sure that’s a surprise.