The Journey from CFO to Board and the Board agenda – Discussion Findings 

Our guest was Adrian Hennah, the Former CFO at Reckitt, Chair of the Audit Committee at Sainsburys, and Non-Executive Director at Unilever. Adrian and Russell Reynolds were also joined by eleven listed company and PE CFOs from varying industries across the UK. We discussed and debated hot topics on the Board agenda and developing trends. Some key takeaways included:

Global Rise of Inflation

To date, current management teams have had little experience of managing this level of inflation which as of April 2022 had year over year increased to is 9.0% in the UK (compared to 7.0% for the previous month). The CFOs around the table agreed that it is essential to face and factor in the implications of rising inflation with a realistic and cautious mindset. The key to this is have good communication with shareholders, customers, and consumers, and to be continuously asking yourselves questions about pricing power, discretionary status of key products, and if CFOs in this climate are acting as leaders or followers.

ESG Requirements

CFOs around the table discussed new reporting requirements and Adrian outlined three key levels to successful ESG reporting.

• Level 1: Doing the easy wins and utilizing your public relations opportunities to bring media attention to small changes in the business
• Level 2: Getting to a slightly more technical understanding of how ESG can be applied to the processes of the business, e.g. packaging, more aspects with cost issues, etc.
• Level 3: Creating a comprehensively sustainable business model that recognizes that there’s a route to generating revenue that is long-term ESG focused

Cyber Security

It was discussed that Executive Committees and Boards can underestimate the risk to cyber security threats due to a lack of understanding. This is primarily coming from the pace at which cybersecurity threats are evolving and the inability to ‘keep-up’. It was noted that unfortunately, the companies that really understand the risk posed by cybersecurity threats were those that had fallen on the wrong side, which can put capital, intellectual property, and personnel at risk.

CFOs around the table debated how to deal with this rising issue, and came to an understanding that businesses should create a common language on how to talk about this threat. Adrian Hennah recommended NIST – the National Institute of Science and Technology – as a resource including intuitive language about how to discuss cybersecurity trends. Others recommended building an assurance framework and having open lines of communication to ensure that all major stakeholders are aware of how to implement the plan in the case of a cybersecurity attack.

It was a lively and engaging conversation with guests commenting how great it was to be back meeting in person again.

Our next lunch in the series will take place on the 20th of July. If you would like to attend in-person at our Russell Reynolds London offices, please feel free to register here.