Research has proved that gender diversity in the boardroom brings real benefits to the bottom line for an organisation. However, only a small minority of CFOs in private equity-backed UK businesses are women.
How can senior female financial professionals change that, and move up to C-suite level? Savant hosted a highly energised and well-attended Women in Finance event that delivered a host of fascinating insights and recommendations. The conversation was led by an expert panel made up of:
Valerie Kendall, Founding Partner
Wendy Hart, Senior Partner
Tamsin Ashmore, CFO
Ultima Business Solutions
DANIELLA SULLIVAN, Senior Finance Consultant at Savant, presents the findings of a lively and wide-ranging conversation.
Reframe your experience and present your credentials with confidence
One of the most significant barriers to becoming a CFO for the first time is the simple fact that you have not been a CFO before. However, it is possible to re-frame the experience you have accrued to demonstrate that you can deal with the demands of C-suite level.
Talk about the things you have done, rather than the things you have not done. Understand the elements of your experience that the business in question is looking for. Tamsin described this process as “shaping the conversation”; if you present yourself and your career history with confidence, it will give recruiters the reassurance they need that you can handle the role in question.
A great CFO can be confident in the right context, while also being completely honest when it matters about where the skeletons are in a company, and what could go wrong in a transaction. Key to this is the ability to understand how a PE-backed business is valued, and what is going to happen in due diligence that will put its numbers under scrutiny.
Understand the strategy of a business, not just the numbers
A CFO needs gravitas, confidence and a fundamental understanding of what drives value financially. However, you also need to be able to answer the question: “And what does that mean for the business?”
As Valerie put it: “That ability to say, ‘This is what we have learned and, therefore, if we do this, it will take us in the right direction’, to demonstrate that you’re thinking about the business in a much wider capacity than simply the numbers is a really valuable skill.”
Even if you have not worked in a PE environment before, take a wider strategic view and become able to articulate the importance of working capital movements. You should be able to say what they mean in terms of headroom, sensitivity analysis and hedging strategy. Taking a forward-thinking view shows you take that overarching perspective.
One attendee observed that women excel when it comes to attention to detail, whereas men tend to take a “helicopter” view. That can be highly valuable in a PE context.
A distressed debt situation can teach you so much
Many CFOs in PE-backed businesses want to work in high growth contexts, but at the same time the experience of a distressed debt can prepare you for anything.
Dealing with suppliers asking for money, having to get into the detail and understand the daily cash flow and balance sheet of a business, can leave you able to tick many of the boxes that recruiters will be looking for – particularly if you can reframe that experience. As one attendee put it: “It’s definitely true that what doesn’t break you makes you.”
Accept that a due diligence process is going to be ‘brutal’
Ultimately, any PE-backed business is going to be sold. That means a due diligence process that is particularly challenging, especially because the senior members of the team are likely to be the only people in the business who know about it. As well as working on the deal, you will have to make sure the business continues to perform – because otherwise the price will be affected.
As Wendy said: “You are going to get waves of questions, things you never thought you were going to be asked in the history of mankind, but you are going to have to be able to answer them.” The process, she said, is brutal – and if you went into a PE-backed CFO role not understanding that, you would be in for a nasty awakening.
One attendee said she felt “wrung out” at the end of such a process, while another said she questioned her own strength of character. At the same time, there is an acceptance that this is just how it is. As Valerie put it: “There is a quid pro quo, CFOs get sweet equity – and the reason for that is because it’s a really tough, challenging, demanding period of your life.”
Preparation is key to any successful PE transaction
Due diligence, Wendy suggested, always takes longer than expected. It is usually four months – which translates into a deal process that takes up to 12 months from first thought to completion.
Ideally, Tamsin said, you should resource out much of the preparation. “Fighting for that resource is critical,” she added. Wendy agreed: “Nothing kills value like a loss of momentum.”
One of the most constructive steps is to start building a data cube up to 18 months in advance, so that all the business information relating to the sale can be sliced hundreds of different ways by the CFO, the CEO, or potential buyers.
Flexibility, communication and a strong rapport with the CEO are all key
Many female financial leaders face extra complications caused by the time pressures of family life and childcare. Refreshingly, several attendees shared their stories of successfully working part-time in senior financial roles, or job-sharing, to facilitate this. It’s also arguable that it can be easier to perform a strategic role like a CFO position in this way than an operational, hands-on day-to-day position.
However, as Wendy said, a deal process can become all-consuming. She added: “It’s about being really clear about your capacity and flexibility.” One attendee agreed: “As long as you’re really clear with people, and you’ve got an understanding and sympathetic CEO, you can make it work.”
Opportunities are unquestionably there for women who want to ascend to the highest rank of the financial ladder in a PE-backed business. As Valerie said: “We do want diversity… which is why every private equity company is phoning up their recruitment firm!”
We send our thanks to our panel and all the guests who enjoyed a stimulating and thought-provoking discussion.
Whatever your recruitment requirements are within PE-backed or corporate businesses, please contact us – we will be delighted to hear from you.