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A CFO World year in review


In April 2011 we launched CFO World's quarterly magazine. We take a look back at what's happened over the year

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How quickly a year passes, and yet disappointingly for business leaders how little things have changed in terms of business prospects. Last spring when CFO World launched the first edition of its quarterly magazine it was at a time of positivity after several years of global recession.

The previous year had shown signs of growth and boards dared to look benignly on the possibility of an upward tick in the economy.

The mood of optimism among CFOs had however weakened in the first quarter of 2011, but finance chiefs, on the whole, remained positive, according to research at the time. Their optimism however was tempered slightly by looming dark clouds.

In just over two weeks in March 2011 the Arab Spring erupted across North Africa and the Middle East elevating oil prices and Japan's earthquake hit causing a nuclear crisis on a scale not seen since the Chernobyl disaster in the 1986.

Perhaps counter-intuitively, CFOs' risk appetite - according to Deloitte's quarterly survey of finance chiefs - rose to the highest level since the survey started in the third quarter of 2007.

The finding was indeed borne out in the interviews we conducted with three CFOs of public companies in different industry sectors.

Richard Pennycook, group finance director of Morrisons -- the UK's third largest supermarket -- appeared in our first edition discussing how he turnaround the floundering FTSE 100 company, and how he was just entering the "growth phase", the last stage in the recovery of the Bradford-based supermarket. By May however Pennycook warned of a tough few months for the supermarket chain as the squeeze on household budgets tightened.

We interviewed Eric Hutchinson, chief financial officer of FTSE 250 business Spirent, during the first quarter and he was upbeat on prospects for the company. His optimism was borne out in the company's preliminary results posted in March when the group reported a 32 percent rise in 2010 pretax profits for the year to December and increased its dividend payment. The company also said it would continue to invest in new test solutions to boost profits.

Lord Davies had also just launched his government-commissioned report into the gender imbalance on corporate boards revealing that only 12.5 percent of FTSE 100 directors were women. He set a voluntary target for the UK's top companies of 25 percent of women in the boardroom by 2015, or face a mandatory quota.

The financial crisis had thrown CFOs into the spotlight once again. With the focus on cost-cutting and finding efficiencies savings the CFO's profile was elevated. One of the results of this phenomenon was that many more CFOs were stepping up into the position of CEO. Colin Day, CFO of Reckitt Benckiser for around a decade resigned his position to take up the top job at Filtrona. David Nish, former CFO at Standard Life had already stepped up to CEO position and hired in Jackie Hunt, one of the few female CFOs.

By the summer what little optimism CFOs had at the beginning of the year had disappeared. According to Deloitte's CFO quarterly study its optimism measure had dropped to its lowest level since 2009, when the UK economy was in recession. Confidence that the recovery could be sustained took a knock and a third of CFOs thought the UK would see re-enter recession.

In his first ever interview John Rogers, CFO of Sainsbury's, told CFO World that the supermarket was preparing to "batten down the hatches" in preparation for a tough 12 months ahead, even though Sainsbury's had reported strong revenue and profits for the past year.

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