Now that the gun has been fired, and the process started to manage our negotiated exit from Europe, businesses have much more questions than answers.
Can we retain access to the single market without agreeing to freedom of movement? Will we really stop sharing intelligence if we don’t get what we want?
Through the confusion, one thing remains clear – the need to ensure that the UK remains an attractive working environment for finance leaders.
The number of non-UK nationals taking leadership roles across corporate Britain has risen dramatically over the last decade, according to new research.
At Chair and CEO level this is perhaps less surprising. Leaders of businesses operating in an environment where the world has become smaller need to be able to drive business globally. There is no reason that leader should be a UK National. If the best person for the job is French, Latvian or Venezuelan then shareholders and head-hunters will ensure they get it.
However, the development in finance is confusing at first glance. There has always been a view that the technical competence required of a main board listed CFO would mean that they trained in their local market, and therefore would be local nationals. If you were trained in the basics of UK financial reporting, you were likely to be a UK National and more likely to end up as a FTSE 100 CFO.
But this isn’t the case. Research shows that a much bigger proportion of FTSE 100 CFO’s are no longer UK Nationals.
Almost 30% of CFOs of FTSE100 companies were non-UK nationals at the end of 2016, against just 8% in 2001, while the range of nationalities also increased, from just six in 2001 to 14 at the end of last year.
These findings beg two key questions. First, is reporting no longer crucial? Second, what will happen to the senior finance talent base in a post-Brexit world?
To say reporting is no longer crucial would be wrong. Clearly an ability to manage the external reporting and to stand for and guarantee, the integrity of the information will always be critical. But there is a definite view that this can be outsourced, in part, to a superb deputy. And whilst technical excellence will always be critical in any CFO, there is a growing demand for stronger and broader commercial leadership too, a skill that is as easily developed in Latvia, France or Venezuela as in London, Liverpool and Glasgow.
Equally, as more businesses develop globally, there is a need for people with global experience. The domestic market is, in many instances, less than 10% of the global business. If the US, South American, Chinese or European market is a much greater percentage of the full business, there is no reason why members of the leadership team shouldn’t come from there. And if the reporting excellence of the CFO is not as singularly crucial as it once was, there is no reason why this leader can’t be the CFO.
Banking, mining and aviation are just some of the international sectors operating all over the globe which prizes excellence above local knowledge and assesses talent globally when hiring. That means CFOs need to raise their game to compete on an international, not local, playing field.
So to add to the Brexit questions, if we make the UK a less appealing place to work for non-UK nationals, do we risk our ability to hire the strongest talent at a time when we need the very best people to run our businesses?
While it is still too early to accurately predict the impact of Brexit, we have seen early signs of two things: first, when looking at both Europeans and Brits when hiring a CFO for a UK business, Europeans were less likely to consider the role than they were pre-Brexit. Second, non-UK nationals in the UK are less likely to consider making their next career move in the UK, instead of looking to return home.
Many will argue this is why they voted to be out of the European Union – more jobs for UK nationals. But the number of non-UK nationals in top roles within the FTSE 100 says that a blend of both has been best for British business for over a decade.
Originally published on Financial Director
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