Aidan Connolly is Group CFO at Travelodge. He has been CFO and/or CEO at WorldPay, Sodexo UK & RoI, and Alter Domus. This interview was conducted as part of our research inquiry into the role CFOs will play in creating a fairer future.
How would you sum up the role of the modern CFO?
Essentially, the CFO is able and expected to see everything in the business. That hasn’t changed, but the tools available and the speed they have enabled have changed dramatically. More modern and effective systems have created greater expectations for the CFO, to the extent that they are de facto the CEO of the internal workings of the business as well as the more historical ambit of the role.
A crucial aspect of the role is your relationship with the CEO. The CEO is the loneliest person in the company. Being at the top, everyone has some sort of agenda or something they want to get out of you. I think that the CFO can play a role here in stripping some of that back and be a trusted partner and adviser to the CEO. Successful CEOs and CFOs trust each other implicitly, and are able to more-or-less finish each other’s sentences. If it’s a very effective partnership you’ll find there’s a lot of bleeding over between the roles as each helps the other out. The CEO’s relationship with the CFO is markedly different from their relationships with other senior people in the business for this reason.
“A crucial aspect of the role is your relationship with the CEO.”
What is uniquely within the gift of the CFO when it comes to fairness and society?
The CFO’s role is, by definition, a contradiction; they are the guardian of risk whilst also being the facilitator and funder of opportunities. This means that, often, you find yourself being the Grinch.
If I start from a position whereby my aim is to produce a better business for those who come after me, then the things that I need to do will likely be less than the wishlist of things that the Green lobby would like me to do. And, although I feel it’s incontrovertible that doing less damage to the planet is obviously better than doing more damage, I also think that my ESG reporting obligation sometimes outstrips the things that are good for my business, and probably for the communities that we operate in. Personally, I prefer things to be simpler and to make a difference.
Start by identifying the problem, and once you’ve identified the issue, ask: what can be done about this? So, to take the example of the number of women in senior positions being nowhere near representative. How do you go about creating a business environment that is genuinely equal opportunity and that enables women to return without disadvantage after maternity leave? Quite simply, it always involves investment and as CFO you are in a key position to take those opportunities to make an impact.
“Quite simply, it always involves investment and as CFO you are in a key position to take those opportunities to make an impact.”
What challenges are facing the modern CFO?
Earlier in my career, there was a time when I felt like annual audits added value when they were done properly. Today, the profession is under pressure and scrutiny and they seem scarcely capable of producing anything coherent or valuable; stakeholders have suffered as a result. I think that’s a real shame and comes down to the consequences of regulation that’s been less robust than necessary for a long time, and the absence of coherent policy for now and the future.
I also think that boards don’t see the value they can get from audit today: it’s seen as something akin to a postage stamp on a letter and so they focus on minimising cost. The combination of that attitude and the decline (perhaps even regulatory prevention) of audit quality inevitably cheapens the process, and so poor outcomes happen. Things that should be flagged in an audit are missed. Audits have become arse-covering exercises. Personally, I ricochet between exasperation and the desire to go back to where it used to be in terms of adding value.
It’s not just about risk, it’s about the value being lost. Although you are obviously obliged to spend money on audits, I always like to see some tangible benefits for the business. Audits involve bright people looking into all the nooks and crannies of the business that the CFO can’t look into very often. They look at lots of businesses like mine a year, so they should be able to provide more value by explaining what we’re doing well and highlighting where we can improve. They should be more of a partner to help me improve my business.
“It’s not just about risk, it’s about the value being lost.”
What would your challenge to your peers be?
Until I was around 40, I had only ever worked in my own businesses, so hadn’t really seen corporate life. When I did eventually move into the corporate world I found that talent is often stifled. I couldn’t understand why, given all the talk about a ‘war for talent’: we had many talented people sitting there without the development they needed. We ultimately recognised this, invested in it and started to promote and develop people from within.