The Role of Finance May Be Changing, But the Route to the Top Remains the SameYou can only join The 100 Group if you hold or have held the position of CFO in a UK company that is or was listed in the FTSE 100 – and if they invite you. The members of this organization are the elite of their profession and certainly do some excellent work reviewing and advising on various impending regulation and the like. But after 20 years of hearing that the role of finance is shifting towards helping develop strategy and increasing partnering with the business, one would have thought that the qualifications, career paths, and origins of these finance leaders would have begun to show some signs of change. Specifically I for one would have anticipated an increase in the proportion of them holding a qualification of the Chartered Institute of Management Accountants and a decrease in the proportion holding a qualification awarded by the Institute of Chartered Accountants of England and Wales.
However, the available evidence suggests that if anything the reverse has happened, (see table). While 80% of FTSE Financial Directors continue to hold one or more accounting qualifications (and many of those that don’t have an MBA or some other higher qualification typically relevant to their industry), it is evident that most still hold a qualification from one of the two bodies that are more orientated towards financial accounting rather than those that are more focused on management accounting. Despite the increasing focus on value creation, my guess is this is never going to change much even over the next twenty years because listed companies always need a head of finance who can tick all the traditional boxes of financing, M&A, compliance, reporting, taxation and investor relations. Such experience is undoubtedly best gained by spending part of one’s career in an advisory role in one of the big accounting groups rather than diligently working away inside companies as a value-adding partner to one’s peers, only to hit a glass ceiling when it comes to getting the senior position. Just isn’t going to happen, is it?
In fact, as another piece of research by the social equality lobbying group, upReach, found that that 70% of FTSE 100 Finance Directors had been privately educated – and one suspects went to good universities, then a spell with one of the Big 4, before moving client side into a senior role, one or two rungs below CFO for a few years of familiarization before moving into the top spot. So if you aspire to being a CFO of a listed company in the UK, the best thing you can still do is choose your parents well – the role of finance may be changing, but the route to the top remains the same.
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