Sally Lake is Group Finance Director at Beazley Group PLC and has worked there since joining in 2006. Here, she shares her perspective on the role of business in addressing climate change and other societal issues, the importance of doing the right thing even when it is not the cheapest or most efficient way forward.
How would you sum up the role of the CFO?
Somewhat flippantly, I would describe the role of CFO as being about finance and everything else at the same time! Today, the role has broadened beyond the classic numbers remit to a role that must take into account and be responsible for all things that could impact the long-term viability and share price of an organization for example, being a responsible business and sustainability.
One of the things that has surprised me since taking on the role four years ago is the importance of storytelling. Take, for instance, trying to explain to a potential investor what we’re about – it's much more powerful to tell the story of how the business became what it is, and what the pivotal moments were in that journey, than to just talk about insurance and the balance sheet. In telling the story you provide context for what we’re trying to do and why we are trying to do it making for a more compelling pitch.
What are the societal issues that keep you awake at night? What can business do to tackle them?
Both personally and in my work, I spend a lot of time thinking about the challenges of climate change and other societal issues. At Beazley, we are clear on the importance of tackling these issues – taking both our risks and responsibilities very seriously and are clear about the contribution we can make. From a climate perspective, we see our role in the transition to a lower carbon environment as being one of enablement – looking for ways to help our clients to transition and we offer coverage to those organisation who are doing the right thing and actively working to reduce their carbon footprint.
When it comes to societal issues, where once it was, it’s no longer acceptable for companies to stay silent and not have a stated position on issues which in turn they will be judged against. So, we can see that we have come a long way over the past decade in recognising these issues and the need to make a change. This shift in expectations for companies is, I think, driven by a generational shift and the quick flow and easy access of information and it isn’t going to go away. Our employees, our customers and our stakeholders have higher expectations now and want to work for, and do business with, companies that both reflect their values and care about solving the biggest societal problems we face today. Twenty years ago, I don’t think very many CFOs were spending a great deal of time thinking about issues like climate change and how to solve for them, whereas today that is simply no longer the case.
“Twenty years ago, I don’t think very many CFOs were spending a great deal of time thinking about issues like climate change and how to solve for them, whereas today that is simply no longer the case."
At Beazley we have a strong commitment to promoting inclusion and diversity, and have made significant great progress in ensuring greater diversity, equality and inclusion here in recent years. I know that a lot of people don’t like the idea of having targets, and nor do I – but I like inequity even less. It would be fantastic if we didn’t have to set these targets, but I struggle to think of any cases where real progress was made without them – in simple terms you do need to set a goal to be able to make a plan to achieve it! We have used targets at Beazley and continue to use them – it’s a way of ensuring we strive to do better in our day to day and remain conscious of the progress made, and the journey still ahead and honestly, and I don’t think we would have made it to where we are today without them. I truly believe that our previous CEO, Andrew Horton, made a huge difference by boldly talking about these targets publicly, raising awareness and bringing people on the journey.
What is uniquely within the gift of the CFO?
As a CFO and finance function you can help ensure that the decisions being made are the right thing to do, not just the most cost-effective. For example, as a global business, we travel quite a bit and have therefore started looking into the viability of using travel options that are more environmentally friendly, such as low-carbon aviation – this is the right thing to do as a responsible business and a market leader, it won’t be the cheapest option but it will be the most sustainable.
Alongside the necessity of taking a more holistic approach than simply using purely financial data to reach the right decision, CFOs can contribute elsewhere. For example, at Beazley we have some $8billion of investment instruments at one time and we are increasingly looking to ensure that those are more sustainable and responsible. Over time, that will mean we can find the right balance between maximising returns in a given period of time and the overall impact of the investment itself, and whether it is sustainable.
What is the thing you’re most proud of in your career so far?
Looking back, I hope I’ve shown that it is possible to choose to raise a family whilst also progressing your career. Its never easy but it is definitely possible, and I always encourage people to take as much leave as they can to spend time with their loved ones.
People shouldn’t misinterpret this as putting the brakes on your career – it isn’t, and I’m proud that I’ve been able to spend time with my three daughters whilst advancing my career and ensuring that my focus on either didn’t suffer so much for it to not be possible. Again, it isn’t easy but it is certainly possible, and I hope my legacy shows that.
If you could put one challenge to your peers, what would it be?
The scariest thing for CFOs today is also the most exciting thing – it's change. The sheer amount of change – within business, technology, and society – is only going one way. One of the great challenges of being CFO is helping prioritise the right change in the right order, with the right resource and values.
As individuals, as companies, and as professionals, making sure we undertake the right change and do it well is going to be the biggest challenge we face. You can spend huge amounts of money on change projects and never actually get anywhere, so it’s critical that you are driven by the outcomes and never lose sight of the criticality of doing the right thing in a way that is sustainable for the years ahead.
"The scariest thing for CFOs today is also the most exciting thing – it's change."