The DNA of The Greek CFO - Ernst & Young

The DNA of the Greek CFOA study of what makes a chief financial officer in Greece2012

Dimitrios Delonas CFO of Nireus Group

Angelos Kallias CFO of Lidl Hellas

Evangelos Raptis CFO of Forthnet

Geert van Iwaarden CFO of Unilever in Greece

Our thanks to the 65 CFOs and Finance Directors who participated in this study and, in particular, to those who shared their insights in a series of interviews:

1The DNA of the Greek CFO

ContentsExecutive summary 2

Navigating a challenging environment 4

A focus on the fundamentals 6

Finance and the broader business 8

Building better CFOs 12

Demographics 14

The CFO’s role 16

Contacts 21

In 2010, Ernst & Young published The DNA of the CFO,1 a report that provided insight into what it is to be a chief financial officer. The report was based on our analysis of a survey of 669 CFOs from across Europe, the Middle East, India and Africa (EMEIA), along with a program of in-depth interviews with leading CFOs and finance directors from these regions.

In this country-specific report, we focus on the changing role, responsibilities and challenges of CFOs based in Greece. The report is based on a survey, conducted in late 2011, of 65 CFOs and finance directors, who are either CFOs of companies headquartered in Greece, or of Greek subsidiaries of major multinationals. Almost two-thirds of respondents represent companies with annual revenues in excess of €50m. To supplement the survey, Ernst & Young also conducted a number of in-depth interviews with CFOs and finance directors based in Greece.

1 The DNA of the CFO: What makes a chief financial officer, Ernst & Young, 2010.

The DNA of the Greek CFO2

The DNA of the Greek CFO

A severe economic crisis has placed the CFO under the spotlight. Nowhere more so than for those within Greece. With the Greek economy in recession since 2008, companies need finance leaders with the core financial skills to manage risk, cash flow and cost control.

But these finance fundamentals are not enough. They may be top of the CFO’s priority list — and consume a significant proportion of their time and attention — but successful CFOs must possess a much broader palette of skills and capabilities. They must have strategic vision, the ability to question and challenge management decisions, and a strong rapport with both internal and external stakeholders.

In this report, we examine how the role of the finance leader has changed in light of economic upheaval, and explore ways in which CFOs are reshaping their role and responsibilities to support their organization through these challenging times.

The need to get the fundamentals of finance right has never been more criticalThree-quarters of survey respondents say that risk management has become more of a priority than it was four years ago, and a similar proportion says that cost management and cash flow have become more urgent. Many CFOs are taking this opportunity to systematize the process of seeking out new efficiencies so that it becomes engrained in business practice — through good times as well as bad.

Core financial management skills are not sufficient in isolationTo deal effectively with the challenges of the day, CFOs must also possess a close understanding of the commercial realities of the business. In addition, they also need visibility into operational functions across the organization in order to understand key drivers of performance. Many CFOs, however, recognize that they need to do more to put this insight into a broader context. When asked where they most need to improve their skills and knowledge, respondents are most likely to point to a requirement for deeper insight into the industry to which their company belongs.

The external environment is the biggest barrier to the success of the CFO in GreeceUnsurprisingly, the impact of the Eurozone crisis looms large in the minds of CFOs in our survey. When asked about the biggest barriers to the effectiveness of their role, respondents point to the challenging economic environment as the most prominent obstacle. Liquidity problems are a major manifestation of this. More than one-third of CFOs in Greece say that bank financing is only available at unfavorable conditions, and one-quarter thinks that domestic banks do not support business at all. Debt restructuring is also a challenge, with most respondents agreeing that banks will only offer this on unfavorable terms.

Executive summary

1/4 believe domestic banks do not support business at all 60% do not enough time to focus

on company strategy3/4 of CFOs say risk management is more of a priority than in 2009

3The DNA of the Greek CFOThe DNA of the Greek CFO

CFOs need to do more to strengthen external stakeholder relationsEffective stakeholder relationships are a critical part of the CFO toolkit but there are signs that some finance leaders are neglecting this aspect of their role. Less than one-quarter say that investor relations and stakeholder management has become a greater priority for them over the past three years. Some external stakeholder relationships may be suffering as a result. For example, although more than 90% say that their relationship with the management board, CEO and other C-level colleagues is good, less than one-third gives the same assessment for their dealings with government and the media. Relationships with investors are better but, even here, there are doubts, with only a slim majority of 61% saying that their interactions are effective.

The pressures of the CFO position prevent some from fulfilling the strategic aspect of this roleThe core finance skills may be in huge demand, but they are just one aspect of the CFO role. Indeed, for the majority of finance leaders in the survey, the traditional financial management tasks consume just half their time, with the remainder being dedicated to broader strategic activities. This more strategic role is the area where CFOs are most likely to say that they add value to their organization. Yet the challenges of the current environment can hamper their ability to fulfill these responsibilities. Only 41% of respondents say that they have enough time to focus on broader company strategy, which suggests that the fundamental financial tasks are consuming more time than CFOs would like.

The CFO role is a destination in itselfThe increased visibility and importance of the CFO role in Greece means that most of those finance leaders surveyed enjoy a high level of career satisfaction. The vast majority are happy with their remit and range of responsibilities, and their potential for career development. A significant majority either aspires to a bigger CFO role or are happy to stay in their current position. Less than one-quarter have ambitions to move to the CEO office.

1/4say investor relations and stakeholder management is a greater priority than three years ago 61% believe relationships with

investors are effective 23% have ambitions to move to CEO


CFOs in Greece are facing the most challenging period in living memory. They must navigate an environment of falling demand, tight liquidity, scarce working capital and rising taxes. To compete effectively in this environment, CFOs must help their organizations to build strong, trusting relationships with banks, customers, suppliers and tax authorities.

The economy has mostly been in recession since late 2008. The outlook for Greece is expected to remain bleak for the foreseeable future. Tough austerity measures have proven increasingly unpopular, and have led to widespread social unrest. There has been a precipitous fall in industrial output and banks continue to face a tight liquidity squeeze that prevents them from extending credit to many companies.

No wonder then when asked about the biggest barriers to the effectiveness of their role, CFOs in our survey point to a challenging economic environment as the most significant problem (see chart 1).

Chart 1: Percentage of respondents who believe these are the biggest barriers to effectiveness in their role (select all that apply)

3

3

8

11

12

28

42

54

Personal skill gaps

Unrealistic/overambitious targets

Relationships with senior companymanagers outside finance

Lack of experience in areas that arebecoming more important to the role

Not enough resources in the finance function

Company culture (e.g., level ofinternal bureaucracy, quality of

interdepartmental relations, transparencyin internal communications)

Challenging economic environment

Other

The economic situation in Greece has placed companies under a tight financial squeeze. Effective cash management — always a core issue for the finance function — has become critical to survival but is increasingly difficult to handle effectively. On the one hand, overseas companies are tightening payment terms and often requiring cash up front in return for raw materials and services. Yet on the other, local customers are doing all they can to extend credit and delay payment in order to manage their own cash flow constraints.

Access to finance remains difficultThese problems are exacerbated by a severe liquidity crunch. With banks deleveraging in an effort to strengthen their balance sheets, credit conditions are becoming tighter, which means that companies seeking to refinance or restructure debt are finding it more difficult than ever to secure funding. These challenges are particularly pressing for smaller, family-owned companies that rely on local banks and do not have access to international markets.

Navigating a challenging environment


CFOs and other senior finance professionals surveyed for this report highlight the scale of the challenge. Almost four in ten say that bank financing is only available at unfavorable conditions, which might include high interest rates, extra collateral and non-market parameters. One-quarter of respondents offer a more negative assessment still, arguing that banks do not support business in Greece at all (see chart 2).

Chart 2: Respondent views on how they find access to bank financing in Greece (percentage)

Other

There is no change in access to bankfinancing now, compared with

before the crisis

Currently banks do not supportbusiness in Greece

Bank financing is only available to the successful company with a clean credit history

Bank financing is available only atunfavorable conditions for the

business — high interest rates, extracollateral, non-market parameters

6

3

25

29

37

With capital extremely scarce, many Greek companies are doing what they can to refinance their debt, either to lock in relatively favorable terms or reschedule payments. Once again, they are finding that banks are reluctant to restructure debt since they are facing liquidity problems of their own. One-third of respondents say that debt restructuring is only available at unfavorable conditions, and one-quarter say that banks are not eager to offer it at all (see chart 3).

Chart 3: How respondents rate the opportunities for debt restructuring of their bank loans (percentage)

Other/not applicable

Banks in Greece are eagerto negotiate debt restructuring

Banks in Greece are not eager to offer debt restructuring

Debt restructuring is availableonly at unfavorable conditions

for companies

23

18

25

34

Even when it is available, debt financing is fraught with complexity and adds significantly to the responsibilities of the CFO role. “If you want to finance your debt, you are on your own as a CFO,” says Evangelos Raptis, Chief Financial Officer of Forthnet Group,

a privately owned company that provides broadband and pay TV services in Greece. “You have to deal with it yourself in terms of putting together your business plan, defending it and running sensitivity analyses. Of course, you can appoint advisors, but ultimately all of the documents, information and analysis are going to come out of the finance department.”

Some CFOs argue, however, that the difficulties that Greek companies are currently experiencing with securing finance are nothing new. “For many Greek CFOs, things were constrained well before the crisis,” says Mr. Raptis. “The bulk of Greek corporates didn’t really have access to international markets because of their size. So, generally speaking, the Greek CFO has always been an embattled individual.”

The tax environment remains “treacherous”In addition to challenges securing finance, companies in Greece also have to contend with a complex, fast-changing and frequently inefficient tax system. Among our respondents, 49% say that their company is facing a more aggressive approach from the tax authorities, and more than one-third say that they are facing an irrational and far-fetched position from tax authorities (see chart 4). “The tax environment in Greece has always been very treacherous,” says Mr. Raptis.

Chart 4: Respondents’ perceptions/experiences of tax authorities in connection with performing a tax audit (percentage)

Other

Tax audits are performed withobjectivity and integrity

We are facing a more aggressiveapproach from the tax authorities

these daysWe are facing an irrational and

far-fetched position, to the largestextent, these days

10

6

35

49

“ If you want to finance your debt, you are on your own as a CFO.” Evangelos Raptis, Forthnet Group


To survive in this challenging environment, companies need finance leaders who can manage the core financial skills of cost control, risk management, tax and treasury with a high degree of skill and dexterity. These skills are now more in demand than ever — and can make the difference between survival and bankruptcy. Finance leaders must also be prepared to consider multiple scenarios and have plans in place to deal with multiple outcomes — including the exit of Greece from the Eurozone.

The challenges of the external environment have emphasized, more than ever, the importance of the financial fundamentals. To survive and thrive against a backdrop of tight credit, uncertain demand and a highly unpredictable and fast-moving economic situation, CFOs based in Greece must pay careful attention to cash flow, risk management and cost control. Among our respondents, these are the three activities that are most likely to have become a greater priority over the past four years (see chart 5).

Chart 5: Percentage of respondents who believe these tasks are more of a priority compared with three years ago (select all that apply)

Improving risk management

Cost management

Cash flow

Advising management/board on businessfundamentals/growth strategy

Improving financial controls

Project management/businesstransformation programs

Corporate governance

Fund-raising

Financial reporting

Regulatory compliance

Investor relations andstakeholder management

Focus on emerging markets 14

22

25

29

34

43

52

60

60

71

72

75

“The traditional finance activities such as cash flow management and keeping a careful eye on working capital have become a critical area of focus,” says Dimitrios Delonas, Chief Financial Officer of Nireus Group, which is the No. 1 company in the world in the production and trading of Mediterranean aquaculture species. “The current liquidity problems in the economy have demonstrated that investment in risk management is essential, so that is something that we have also been looking at very carefully.”

A focus on the fundamentals


In addition to dealing with the traditional aspects of the finance role, CFOs are also finding that they need to develop new areas of technical knowledge, particularly in the legal domain. “There is a lot of pressure on CFOs to be the public face of the company when dealing with banks,” says Mr. Raptis. “Finance people have always had to have some sensitivity to legal issues, but these have become a lot more complex because you may be dealing with anything from new types of legal agreement to debt restructuring and even bankruptcy.”

Careful monitoring helps CFOs to tackle the crisisA strong focus on costs and risk requires finance leaders to have visibility into every part of the business in order to spot inefficiencies or emerging threats. Asked about the measures they use in their organization to tackle the consequences of the downturn, respondents point to close monitoring as the most valuable tool they have (see chart 6).

Chart 6: The main measures used by respondents to tackle the consequences of the recession during the crisis period (percentage) (select all that apply)

Other

Flexible working arrangementsfor employees

Divestitures/divestments/disposal of assets

Lay offs/reduction of personnel

A combination of all these measures

Close monitoring/reduction of costs

2

5

12

15

38

52

With the situation in Greece changing on a daily basis, CFOs must pay very careful attention to the implications of new developments, and be able to respond quickly to emerging risks or opportunities. “Although we still have a long-term view, our focus is currently on making sure that we stay very close to developments and that we can adjust our plans quickly as required,” says Geert van Iwaarden, CFO of Unilever, a consumer products company, in Greece.

Scenario planning takes center stageThe unpredictability of the external environment highlights the importance of considering a range of potential scenarios. For many CFOs, this means holding frequent conversations with stakeholders across the business in order to spot early warning signals. This can then be used, along with other inputs, to inform a scenario-based approach to assessing risks that enables companies to explore different outcomes and their impact on the business. “We need to ensure that we are closely connected to the environment so that we can spot issues and react quickly,” explains Mr. van Iwaarden. “Because things change so quickly, we need to have a plan B and plan C right from the start rather than simply a base plan.”

One scenario that is foremost in the minds of many CFOs is the potential exit of Greece from the Eurozone. “As part of our risk management, we took steps to understand our exposure if Greece would change its currency,” says Mr. van Iwaarden. “We needed to understand what would happen to the P&L, balance sheet and cash flow statement, and how it might affect our access to funding. We also looked beyond Greece, to consider possible implications for the Unilever group.”

“ We need to ensure that we are closely connected to the environment so that we can spot issues and react quickly.”Geert van Iwaarden, Unilever, Greece


The core financial skills — as important as they are — should not dominate the CFO’s agenda. The key area where finance leaders can add value is in their ability to frame strategic discussions and add rigor and process to decision-making. CFOs in Greece are playing a more central role in strategy, and this is helping companies to make decisions from a position of knowledge and understanding against a highly unpredictable and fast-changing environment.

Although the financial fundamentals may be more critical than ever, they are just one aspect of the CFO role. When asked where they thought they had personally created the most value for their organization over the past three years, respondents pointed to the provision of strategic analysis and advice as the activity where they think they make the biggest contribution (see chart 7).

Chart 7: Where respondents believe they personally created the most value for their organization in the past four years (percentage)

Prudently managing tax-related issues

Effectively overseeingthe treasury department

Ensuring effective risk management

Implementing stronger governanceand controls

Building the company’s externalreputation for excellence in financial

management

Improving working capital management

Supporting and funding growthopportunities for the business

Improving quality of thefinancial reporting

Delivering significant cost-efficiencies

Steering the company through thefinancial crisis

Providing strategic analysis and adviceto the company management

2

3

5

6

6

8

9

11

12

18

18

Other 2

The fast-changing external environment has highlighted the need for CFOs and their teams to have visibility into every part of the business. By building good relationships across operations and business units, finance leaders can identify issues early and provide the insight and rigor that is necessary to resolve problems, make good decisions and capture opportunities. Among our respondents, the ability to develop a closer understanding of the commercial aspects of the business is seen as the most important quality that CFOs need to manage the challenges of their role (see chart 8).

Finance and the broader business


Chart 8: Percentage of respondents who believe these are qualities that a CFO needs to be able to develop to face the challenges of their role (select all that apply)

Other

Closer relations with COO/CTO

Regular communicationwith financial institutions

Being a strong team player

Better understanding of the operatingperformance of the company

Better understanding of the commercialaspects of the business

3

37

51

46

65

72

Deeper industry knowledge is a differentiatorKnowledge of the sector in which the company operates can also be a key differentiator in the CFO role. By understanding the broader dynamics that may affect their industry as a whole, finance leaders in Greece will be better placed to spot early warning signs or identify opportunities that might emerge in a fast-moving and turbulent environment. Yet this broad sector knowledge is an area where CFOs are frequently lacking. Among our respondents, having deeper insight into the industry in which their company operates is seen as the area where they would most like to improve their skills or knowledge (see chart 9).

The CFO as business enablerThis deeper industry insight can be a powerful catalyst for forming strong, constructive relationships with commercial managers. It can also alter the perception of the finance function among the broader business. “The business can sometimes be surprised to discover that the finance guys are not just there to produce monthly accounting reports, but that we can also contribute a lot to the discussion,” says Mr. Delonas. “By asking the right questions and challenging their thinking both on the top-level strategy development and also on more operational issues, finance can make a significant contribution to the business agenda.”

Chart 9: Percentage of respondents who believe these are the skills or knowledge they need to develop most (select up to three)

People management skills(in your department)

Project or change management skills

Stakeholder management

Analysis and advisory skills

Presentational skills (e.g., media andbroadcast training)

New trends and techniques inworking capital

Deeper insight into keycountry markets for your business

Skills to manage upwards(e.g., relationship with CEO/board)

New trends and techniques in financialmanagement

Communication and influencing skills

Designing and executing strategy

Deeper insight into the industry towhich your company belongs

8

11

12

14

15

18

18

18

25

26

32

40

Among our respondents, more than half say that finance’s standing within the organization has improved in the past four years (see chart 10). This shift is likely to reflect two broad trends: first, the critical role that finance leaders have played in helping companies in Greece steer through a highly difficult period; and second, the structural changes that many organizations have made to embed the finance function more deeply within the business.

“ The business can sometimes be surprised to discover that the finance guys are not just there to produce monthly accounting reports, but that we can also contribute a lot to the discussion.” Dimitrios Delonas, Nireus Group


The perception of the finance function as an enabler of business means that the business is now more likely to seek out the skills and capabilities that CFOs can bring to the decision-making process. Among our respondents, just over half say that other business managers routinely turn to finance for advice on key aspects of strategy (see chart 10).

Chart 10: Percentage of respondents who agree with the following statements?

Strongly agree Agree

23

12

6

9

13

31

41

35

26

21

Finance's standing within theorganization has improved

in the last three yearsOther business managers in the company

routinely turn to finance for adviceon key aspects of strategy

I have enough time to focus on broadercompany strategy

The financial crisis has forced us torefocus on controls and reporting, at the

expense of more strategic initiatives

CFOs are often unsung heroeswithin companies

According to Mr. van Iwaarden, a key benefit of this stronger relationship between finance and the business is the ability to help the company make the right choices at the right time. “Finance as a function is well positioned to integrate the different views across the management team, and to facilitate the process of making choices with the right financial analysis,” he explains. “As CFOs, we can serve as catalyst and facilitator for the decision-making process in an efficient way, and ensure that there is the right amount of challenge when strategic choices are to be made.”

But again, a careful balance needs to be struck. Although challenging strategic choices is important, CFOs must ensure that they do not reinforce outmoded perceptions of finance as the “business prevention unit” that picks holes in any initiative. “You can’t be the devil’s advocate all the time,” says Mr. van Iwaarden. “Of course, we need to speak up consistently when necessary but we must do so in a way that is respectful and ultimately constructive. If we are just seen as the policeman the whole time, then we are not doing our role justice.”

This shift toward a more strategic, “business partnering” role for finance can be extremely beneficial, but it is not always an easy transition to make. For many companies in Greece, the challenges of dealing with tax, treasury and other core finance issues are so all-encompassing that it can be difficult for CFOs to break away from these tasks and devote more time to their business partnering responsibilities. Among our survey respondents, 62% say that they spend half their time on traditional financial management tasks and half on broader strategic tasks (see chart 11). Yet 59% agree that they do not have enough time to focus on broader company strategy (see chart 10). This suggests that, in a significant number of companies, the more strategic aspect of the finance role may be being neglected.

Chart 11: How respondents divide their time between traditional financial management and a broader strategic role (percentage)

Other

I spend all of my time on broaderstrategic tasks

I spend all of my time on traditionalfinancial management

I spend half of my time on traditionalfinancial management tasks and theother half on broader strategic tasks

15

5

18

62

The skills of diplomacy have become crucialSuccessful business partnering depends on having senior finance executives with strong communication and diplomacy skills. Yet this is an area where many see room for improvement. When asked where they most need to improve their capabilities, more than one-quarter of respondents point to communication and influencing skills (see chart 9).

CFOs and their teams need to build effective relationships across every function in the business. One important aspect of this is the ability to strike the right balance between partnering with the business to help them achieve strategic objectives while also serving as the objective “conscience” of the business. This means that, in some cases, CFOs must be an “enabler” of business, while in others they should be prepared to stand firm on issues that they perceive could be damaging to the organization. “You need technical knowledge in order to understand the fundamentals, processes and systems,” says Angelos Kallias, CFO of Lidl Hellas. “But these also need to be combined with interpersonal skills. You can’t have one without the other.”

Finance and the broader business (continued)


Mr. van Iwaarden emphasizes that the softer skills that characterize the more “enabling” side of the business partnering role should be combined with a willingness to be firm when necessary. “The softer skills are important to work in a spirit of collaboration but, at the same time, we also need to be clear and protect the company’s financial interests as appropriate,” he explains. “Striking the right balance between being collaborative and firm is very important.”

External stakeholder relationships need attentionIn addition to building strong relationships within the business, CFOs must also develop and maintain effective interactions with external stakeholders. At a time when investors, regulators, rating agencies and the media are all more keen than ever to access objective, trustworthy information about the business, finance leaders are increasingly taking center stage. They can play a critical role in reassuring stakeholders about the strength of the business — and are trusted to impart both the good news and the bad.

“If you’re able to present consistent, transparent data that people understand and trust, then you are ahead of the game,” says Mr. Delonas. “You also need the strength of character so that you are not afraid of explaining difficult things or the cause and effect of different drivers of your business.”

But while greater transparency with external stakeholders is important, effective finance leaders also recognize that there must be a balance between openness and disclosing competitive information. For Mr. Delonas, the key is to determine where exactly competitive advantages lie. “You have to do your homework and hold discussions internally about what you should disclose,” he explains. “It’s our obligation to explain to investors the real business drivers, and the inner logic and rationale behind our decisions and, in most cases, that is more important than being afraid of saying too much.”

Many CFOs also admit that their relationship with external stakeholders is not always as strong as that with internal peers. With the exception of auditors, the top five stakeholders with whom CFOs say they have the strongest relationship are internal. For example, 94% of respondents think that their relationship with other C-level colleagues is good or very good, and 90% make a similar assessment of their relationship with the CEO (see chart 12).

Chart 12: Percentage of respondents who rate their business relationships with the following stakeholders as good or very good

GoodVery good

42

28

45

34

26

14

18

18

15

2

54

28 66

63

45

48

51

49

43

35

37

26

23

Auditors

Other C-level colleagues

Management board

Chief executive officer

Chief operations officer

Financial institutions

Creditors

Investors

Analysts

Regulators

Media

Politicians/government

3

By contrast, relationships with external stakeholders are, in general, not nearly so effective. Only one-quarter of respondents think that their relationship with government is good or very good, and 29% offer a similar assessment of their interactions with the media. Dealings with investors fare somewhat better, but even here, only a slim majority sees the quality of the relationship as effective.

With so much uncertainty pervading the Greek economy, strong investor relations and financial reporting have become critical to maintain confidence. “We’re continually improving our finance reporting, both internally and externally,” says Mr. Delonas. “By broadening and strengthening our KPIs, we can more accurately reflect the cause and effect relations from business and be able to foresee change. These indicators can be powerful tools to help us and our investors to understand what’s going to happen in the future.”

“ It’s our obligation to explain to investors the real business drivers and the inner logic and rationale behind our decisions and, in most cases, that is more important than being afraid of saying too much.” Dimitrios Delonas, Nireus Group


The finance function has increased its standing and profile within the business. Yet, in setting the bar higher than ever, it has become more difficult for companies to find candidates who have the necessary experience and breadth of skills. Broadening the pool of potential recruits is one part of the solution, but more important is the need to develop ways to give finance professionals exposure to different projects and parts of the business.

Finance leaders who possess a combination of strong technical skills, a grasp of the commercial realities, strategic vision and excellent communication skills are rare. In our study conducted on the future requirements of the Group CFO role, Finance Forte,2 almost three-quarters of senior finance professionals agreed that very few people in their current finance function have the skills to succeed as Group CFO. And 58% agreed that the breadth of skills that are necessary to be a successful CFO means that the pool of good candidates is shrinking.

To make matters worse, some CFOs questioned for this country-specific report think that Greece is lagging behind other countries in its ability to nurture the right combination of skills in its finance team. “It can be difficult to find the type of person who has mastered the fundamentals but who also has a very good business understanding along with relevant education, such as a good MBA,” says Mr. Delonas. “And, in my experience, I think Greece is some way behind a number of other European countries in having the availability of finance professionals who possess these skills.”

Greek companies look beyond traditional recruitment boundariesThere are signs, however, that the situation is improving as finance functions come under increasing pressure from internal and external stakeholders to perform a broader role. “As shareholders, owners and CEOs start demanding a lot more from their finance teams, that will trigger an executive search beyond the traditional scope of profiles that are currently being sought in the market,” says Mr. Raptis.

Companies are also playing their part by putting in place talent management programs that give senior finance professionals the breadth of experience they need to succeed in the top role. Short-term rotations out of finance and into commercial positions can be one way of giving finance executives deeper knowledge of the business and sector. “Members of the finance team need to develop experience from other parts of the business in order to understand and fulfil their own role more effectively,” says Mr. Kallias. “By gaining experience in sales, procurement or even technical parts of the business, finance professionals can then bring that back to the finance function and use it to develop a better understanding of their day-to-day role.”

Building better CFOs

2 Finance forte: The future of finance leadership, Ernst & Young, 2011.


Broader experience creates more well-rounded finance leadersWithin the finance function itself, professionals can also become more rounded and commercially aware by becoming involved in large, company-wide projects, such as mergers and acquisitions or the implementation of enterprise resource planning systems. Among our respondents, leading a large project is seen as one of the top three factors that have helped them in their career development to date (see chart 13), after motivation and hard work, and interpersonal skills and networking. “Leading a big project is a very useful experience because it enables finance professionals to test their own leadership capabilities with bigger groups of people,” explains Mr. van Iwaarden. “Driving an agenda toward successful completion is excellent preparation for the challenges of the senior finance role.”

Chart 13: The importance respondents attach to the following in their career development to date (percentage) (select all that apply)

Working for companies compatible withyour values and beliefs

Educational qualifications

International postings/assignments

Company-provided training

Following in the footsteps of role models

Mentoring from senior executives

Interpersonal skills and networking

Involvement in supporting major businessprojects (M&A, international expansion,

cost reduction programs, etc.)

Motivation and hard work 92

78

73

66

63

60

57

31

20

The CFO role is a destination in itselfWith an increase in the breadth, influence and profile of the CFO role, the majority of respondents see it as a career destination, and not a staging post to the role of CEO. Almost two-thirds say that they are either happy to stay in their CFO current role, or will seek out a bigger CFO role as the next step in their career. Less than one-quarter say that they will be seeking out a CEO position (see chart 14). “It remains rare to see a CFO rise to the ranks of CEO in Greece,” explains Mr. Raptis.

Chart 14: The role which respondents aspire to (percentage)

Chief operations officer

Other

Start own business

Chief executive officer

Happy to stay in current post

A bigger CFO/FD role (e.g., Group CFOor CFO of larger company)

2

3

6

17

23

49

Besides tradition, an important reason for this seems to be a high degree of satisfaction with the finance leadership role. An overwhelming 95% of respondents are satisfied with their remit and range of responsibilities, and 89% are satisfied with their ability to influence broader corporate strategy (see chart 15). They are also confident that they have the right resources and headcount in the finance function to perform its role. Where they do have concerns, it tends to be around their own workload. One-third, for example, say that they are not satisfied with their work-life balance. The current state of the domestic economy, and the need to navigate highly challenging issues, such as liquidity and working capital management, understandably add to the pressures.

Chart 15: Respondent satisfaction with aspects of their role (percentage)

Compensation, benefits and incentives

Ability to influence broadercompany strategy

Remit and range of responsibilities

Allocation of resources to finance(headcount, budgets, etc.)

Potential for career development

Work-life balance

Not satisfied Quite satisfied Very satisfied

5

11

12

11

14

33

52

55

63

72

56

51

43

34

25

17

30

16

“ Members of the finance team need to develop experience from other parts of the business in order to understand and fulfil their own role more effectively.”Angelos Kallias, Lidl Hellas


Demographics

The following charts show the attributes of the 65 CFOs and FDs we surveyed and the characteristics of the organizations they represent.

Career history and job titleWhere respondents have spent the majority of their career (percentage)

Gender, age, qualifications and tenureGender

86% male, 14% female

Other

At my current companyin a department

other than finance

At accounting firms

At consulting firms

At other companiesin the same industry

In banking/financialservices

At my current companyin the finance function

At other companiesin different industries

37

35

9

8

3

3

3

2

51%

40%

3%2% 4%

Group CFO/FD

Country CFO/FD

Regional CFO/FD

Divisional FD Others

Job title

Age (years) (percentage)

30 to 39

40 to 49

50 to 59

60 to 69 3

20

57

20

Highest qualification (percentage) (select all that apply)

Other

PhD

Other university degree

Other post-graduatedegree

Chartered accountant

Business/accountancyrelated bachelor's

degree

Master's degreein finance

MBA 48

20

18

12

11

11

5

3

• The average Greek CFO is male, aged 46 and has an MBA.

• He has been in role for four years and is most likely to have spent the majority of his career within a corporate environment, as opposed to an accountancy or consulting firm.

• He is broadly similar to the average CFO within EMEIA, who is also male, 42 years old and has been in his current role for five years and nine months. The EMEIA CFO is less likely to be MBA qualified, favoring a degree in finance.

• Despite the breadth of both the EMEIA and Greek studies, what is clear from the results is that the respondents represent a distinctive and unique, community of professionals. The lack of diversity across segments is marked.


Time in current role (percentage)

14

46

20

14

6More than 15 years

10 to 15 years

6 to 10 years

2 to 5 years

Less than 2 years

Company ownership, revenue and sector

Ownership (percentage)

35

18

17

14

8

8Other

Subsidiary of aforeign private company

Local company,privately owned,

not listed

Part of a biginternational group

Local company, listed

Subsidiary of a foreignlisted company

Annual revenue (percentage)

€1m to €10m

€10m to €20m

€20m to €50m

€50m or more 63

23

9

5

Sector (percentage)

5

3

6

3

8

8

5

2

2

2

3

3

3

2

2

5

5

5

5

12Other

Other transport

Telecommunications

Technology

Real estate

11Retail and wholesale

Power and utilities

Pharmaceuticals

Oil and gas

Media andentertainment

Manufacturing

Logistics anddistribution

IT

Health care

Insurance

Banking andcapital markets

Consumer products

Other

Life sciences

Automotive

Other


The CFO’s roleThe CFO’s role is broad from developing to enabling to executing strategy. We believe these six segments represent the full breadth of the CFO’s remit. The leading CFOs we work with typically have some involvement in each of these six — either directly or through their team. While the weighting of that involvement will depend on the maturity and ambition of the individual, the sector and scale of the finance function and economic stability, they are all critical to leadership.


Leading key initiatives in finance that support overall strategic goals

Ensuring businessdecisions aregroundedin sound financial criteria

Representing the organization’s progress on strategic goals to external stakeholders

Providing insight and analysis to support the CEO and other senior managers

Developing and defining the overall strategy for your organization

Funding, enablingand executingstrategy set by the CEO

The CFO’s role

1

2

34

5

6

EXECUTION

ENABLEMENT

D

EVEL

OPMEN

T

Commun

icatin

g to the external

marketp

laceTrusting the numbers

Providing insight

Getting your house in or

der

Funding organizational strategy

Deve

lopi

ng b

usin

ess

stra

tegy


Core skills Core knowledge

• Taking a commercial view in partnership with the business

• Identifying commercial, financial and economic risks from business propositions

• Establishing profitability of business propositions• Providing robust but constructive challenge to business

stakeholders• Communicating clearly the financial implications

of proposals

• Knowledge of the organization’s business• Detailed knowledge of products/service lines• Awareness of the market and commercial environment• Knowledge of investment appraisal• Knowledge around approaches to profitability analysis

Key experiences Key relationships

• Business case appraisal• Benefits tracking and realization• Experience in pricing and profitability analysis• Cost management• Planning and forecasting

• Chief Executive Officer/Chief Operating Officer• Business unit heads• Heads of key support functions: Risk, IT, Operations,

HR, Marketing and Sales• Finance business partners• Audit Committee

Ensuring business decisions are grounded in sound financial criteria

Representing the company’s progress on strategic progress to external stakeholders

6

Com

munica

tion to the external

marketplace

Developing and defining the overall strategy for your company

5

Dev

elop

men

t of

bus

ines

s st

rate

gy

Funding, enablingand executingstrategy set by CEO

4


3



der

2

Providing insight and analysis to support CEO and other senior managers

Providing insight

Trusting the numbers

1

Ensuring businessdecisions are groundedin sound financial criteria


• Communicating financial information effectively• Assessing drivers of profitability• Identifying and communicating areas of risk• Forecasting future performance based on knowledge

of past performance• Identifying corrective action where required

• Knowledge of the organization’s business• Detailed knowledge of products/service lines• Awareness of market trends, risks and issues• Knowledge of key performance indicators (KPIs)

in relation to the strategic plan• Business performance management• Knowledge of competition performance


• Financial planning and reporting• Accounting and reporting for projects and other

non-recurring initiatives• Experience in identifying non-financial drivers of financial

performance• Experience of identifying issues and corrective actions• Operating at Executive level• Markets trends analysis

• Chief Executive Officer/Chief Operating Officer• Business unit heads• Heads of key support functions: Risk, IT, Operations,

HR, Marketing and Sales• Finance business partners• Strategy Director• Corporate Development Officer

Providing insight and analysis to support the CEO and other senior managers

2Providing insight and analysis to support CEO and other senior managers

Providing insight


6

Com

munica


marketplace


5

Dev

elop

men

t of

bus

ines

s st

rate

gy


4


3



der


1



• Leadership skills to drive through change in finance• Setting and communicating the vision and strategy

for finance• Able to engage with business stakeholders to determine

the appropriate role for finance• Bringing together disparate stakeholders within finance

and the business• Sponsoring delivery of major change in the finance

function

• How finance should be organized to deliver value to the business

• Understanding of finance processes and implications for the operating model

• The components of the finance operating model and the interdependencies

• Finance systems and implications for change• Drivers of cost and value in finance


• Delivery of major change in finance• Finance process improvement• Designing changes to finance operating models• Involvement with delivery of finance systems• Engaging with internal customers around service delivery

transformation

• Chief Executive Officer• Business unit heads• Heads of key support functions: IT, Marketing, Risk,

Operations, HR• Senior finance managers• Business unit finance teams



6

Com

munica


marketplace


5

Dev

elop

men

t of

bus

ines

s st

rate

gy


4

Funding organizational strategy 3Leading key initiatives in finance that support overall strategic goals


der

2


Providing insight


1


We believe there are core skills, areas of knowledge, experiences and relationships to cultivate in order to excel in each of these six areas of the role:

The CFO’s role (continued)



• Funding the organization’s operations• Prioritizing investments• Developing strategic plans to achieve corporate goals• Understanding the key value drivers• Turning strategic plans into operational plans and targets

(including defining KPIs)• Designing the implementation program• Monitoring progress against strategy

• Capital management• Project financing• Financial risk management• Operational risk management• Strategic and operational planning• Performance management systems• Program management• Change management


• Involvement in determining funding requirements• Securing funding for operations and major projects• Management of working capital• Implementing financial risk management strategy

e.g., interest rate, foreign exchange and market risk• Developing strategic plans• Managing large and complex improvement/

change programs• Managing a merger or acquisition

• Chief Executive Officer/Chief Operating Officer• Business unit heads• Risk Director• Operations Director• External funding providers• Key investors• Treasurer

Funding, enabling and executing strategy set by the CEO


6

Com

munica


marketplace


5

Dev

elop

men

t of

bus

ines

s st

rate

gy

Funding, enablingand executingstrategy set by CEOFunding organizational strategy

43



der

2


Providing insight


1



• Translating corporate goals into a clear strategy• Identifying financial and risk issues in relation to

corporate strategy• Delivering a workable strategic plan within known

constraints• Creativity/ability to think “out-of-the-box”/

conceptually strong• Analyzing portfolio of opportunities • Visionary/a story teller/ability to build trust and

motivate people• Effective communication of financial and risk issues to

C-suite colleagues• Providing robust financial challenge at C-suite level

• Strategic and operational planning• Knowledge of the organization’s business• Detailed knowledge of products/service lines• Business model design• Scenario planning• Good overview of the industry structure and challenges• Strategic frameworks and theory• Awareness of the market and commercial environment• Aware of industry and organization risk profile• Awareness of IT as an important business enabler


• Strategy development• Development and implementation of business plans• Monitoring achievement of plans and targets and taking

corrective actions where required• Operational and financial risk management• Product and market development

• Chief Executive Officer• Chief Operating Officer• Business unit heads• Chief Information Officer• Risk Director• Marketing Director• HR Director• Strategy Director• Corporate Development Officer



6

Com

munica


marketplace


5

Deve

lopi

ng b

usin

ess

stra

tegy


4


3



der

2


Providing insight


1



• Clear communication of performance• Perspectives on organization’s performance relative to

main competitors• Detailed knowledge about main value drivers/key KPIs

and initiatives to improve them• Positive communication around management of key risks• Taking a forward looking view• Anticipating and responding to questions from media,

analysts and investor community• Responding positively to issues raised by industry

regulators

• Knowledge of the organization’s business and deep insight into the industry

• Detailed knowledge of products/service lines• Awareness of the market and commercial environment• Awareness of impact of local regional and global

economies on financial performance• Accounting technical knowledge to supervise Financial

Statements


• Preparation of financial information for external publication and communication to the capital markets

• Dealing with parties external to the organization• Engaging with media• Managing relationships with external auditors• Managing resolution of key accounting and control issues

• Chief Executive Officer• Chairman• Executive and non-executive boards• Other key governance committees e.g., audit,

remuneration• External auditors• Media and Investor Relations• Regulators



6Developing and defining the overall strategy for your company

5

Dev

elop

men

t of

bus

ines

s st

rate

gy


4


3



der

2


Providing insight


1


Commun

icatin

g to the external

marketplace

For further information about this report, please contact:

Panagiotis Papazoglou Sandra SassonCountry Managing Partner Marketing & CommunicationsTel: +30 2102886417 Tel: +30 2102886032Email: [email protected] Email: [email protected]

Our CFO programThe DNA of the Greek CFO is one of a series of studies from our CFO program, which we hope brings something different to the CFO of today and tomorrow. The program seeks to provide insight and guidance on aspects of personal interest to the CFO as they seek to develop themselves, their teams, and learn from others within their community. Other publications from the program include:

The Master CFO SeriesA collection of studies on particular events and experiences that CFOs encounter as part of their role.

To request a copy of any of these studies, or for further information on our program of investment in CFOs, please go to www.ey.com/cfo.

Finance forte The future of finance leadership

(Vol. 2)What lies beneath?The hidden costs of entering rapid-growth markets

(Vol. 3)A tale of two marketsTelling the story of investment across developed and rapid-growth markets

(Vol. 1)Back seat or center stage?CFOs and the media

The Master CFO Series

The DNA of the CFOA study of what makes a chief financial officer in Europe, the Middle East, India and Africa

Ernst & Young

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About Ernst & YoungErnst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

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© 2012 EYGM Limited. All Rights Reserved.

EYG no. AU1198

In line with Ernst & Young’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content.

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

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