Beyond Finance: The CFO’s Role in Leadership, Ethics, and Governance with Kate Cooper, CFO at the Institute of Directors

Kate Cooper: Foreign.

James Roach: Welcome to the Finance Seat. Practical podcast for finance leaders who want to know what actually works. I'm your host, James Roach, managing Director of the specialist finance recruitment consultancy Head Start and a former Finance Director myself. Each episode I'll be sitting down with a different CFO or fd, to discuss how they build strong teams, manage uncertainty, uh, and deliver change so that you can do the same. Foreign. Welcome to the Finance Seat. I'm joined today by Kate Cooper. Kate, thanks for joining us. Could you give us a quick intro who you, uh, are and what you do?

Kate Cooper: Yeah. Hi, James. Thanks for, um, having me today. Uh, so I'm Kate Cooper. I'm the CFO at the Institute of Directors. Um, Institute of Directors is the professional body for company directors in the uk. Um, we set the professional standards for the Chartered Director qualification and support our members in their roles as company directors.

James Roach: How long have you been there?

Kate Cooper: Um, just three years now. Yeah, three years gone fast. It doesn't feel like that long, but still really enjoying it.

James Roach: Great. And so, looking back, just to kick things off, I suppose, here, looking back over your career to date, um, have you got any kind of seminal moments, key moments that you think that shaped who you are now, what you're doing now?

Kate Cooper: Yeah, I think. Um, so I spent, um, started my career, um, Big four training, you know, chartered accountant routes, um, and then moved into industry and have spent most of my career in commercial or FP and A type roles, um, which is where I love to be and operate. Um, and I think there came a point in my career, um, around the time I was head of Commercial Finance at KCOM and thinking about progressing to that finance director, maybe CFO role and felt I needed to kind of prove to myself and maybe others that I could do the more technical side. Um, so I purposely took a role as a group fc, um, working for an energy company, uh, which was not what I love doing, but, um, kind of really proved to myself actually that I could do that side of it and gave me the confidence that I needed to know to then step up into the Finance Director role, which was my next role following that.

James Roach: And do you think it was worthwhile?

Kate Cooper: Yeah, definitely. I think, um, anyone who wants to progress to that level, you don't need to be the expert at everything, um, you need to know enough, um, to know what you're talking about and have credibility in the board, um, but you're not doing everything, so you just need to know enough and have the right people supporting you, uh, so that you can cover all bases.

James Roach: Did you Notice that shift then from being the person that was doing and subject matter expert and suddenly I'm in a leadership role. What was that? Bit of a shock.

Kate Cooper: Yeah, I think, um, when you're at that operational leader level, so kind of head of finance group, ah, FC or what have you, you can't really see, um, beyond the ledge sort of thing. You can't quite comprehend and understand really what it means to be that next level up. Um, and being a strategic leader in an organization really is a different role and requires a different set of skills to the ones that you've kind of been used to in your function. Um, so, you know, I'd say being really great, being a really great functional leader in finance isn't enough. You need to develop those other skills, those leadership skills, strategic skills, to step into that role.

James Roach: Someone once said to me, it's totally different because I have to set the agenda. I've no longer got a to do list, albeit I do get a massive to do list, but it's me setting it. Is that what you've, what you found in your experience?

Kate Cooper: Yeah, I think my approach is very much collaborative with my team. I'll work with my team and get their input and insight because that's really invaluable. Um, they're the ones on the ground working with others, partnering with others in the business. Um, but yeah, setting that direction, making the difficult decisions, um, and the tough calls, um, and supporting my team to be the best that they can be. That's part of my way of operating,

James Roach: really moving on to something that I know is close to your heart. Uh, women in senior finance positions, um, there's been movement, hasn't there? And obviously we're working on her finance, uh, circle to try and promote it even further. Um, what do you think though? What barriers do still exist?

Kate Cooper: I think there's a few things. So, um, Covid made great stuff, strides forward in terms of access and flexibility. And I think, you know, the reality is in society, um, women do typically still bear the brunt of kind of, um, parental responsibilities. And as leaders, you know, we are, uh, it's our duty to ensure that we remove those barriers. So things like flexible working. When I say flexible working, I don't mean working less or working part time. I mean kind of allowing people to work when and where works best for them. You know, it's not about being in the office till 7pm, 8pm and going home. You know, creating an environment and a culture where it's okay and acceptable to walk out the door at Five o'. Clock. And um, also equally acceptable to log on at 9 o' clock once your kids are in bed to finish off what you want to do. You know, all of that, there's a lot of taboo. And um, you know, I think that's created a lot of guilt for particularly um, you know, mothers and parents, you know, of either gender around just taking that flexibility. And um, I think equally it's down to women to um, lead the charge of that and lead with confidence. You know, we are so often I hear women in my teams as well, you know, apologizing for, you know, taking their kid to the doctors or going to the um, Christmas play or, you know, oh, I'm sorry, I've got to do this and I'll make up the time here. And you know, guys don't do that in my experience. They just say I'm doing this and, um, that's what I'm doing. Um, and you know, I'm going to get this done. Then they just don't have the same, um, guilt around it. And I think, you know, we really just need to let go of that as well.

James Roach: How do, how do businesses help that to happen though? Because that word confidence I think is key, isn't it? And we've talked about that a lot in male finance leader or leaders generally and female leaders generally, that, that is a confidence thing. Guys, 10, oh, you know, I can do this. And that's how we bought up, um, women sometimes, you know, it's right look after the children and things like that. But we're breaking through that with confidence. But for those that struggle with the confidence side of it and being able to say, I'm not going to make the time up or I am going to go and do this. What are businesses doing differently to facilitate that, do you think, or what you've seen?

Kate Cooper: I think part of it is around policies and procedures and having that, uh, flexibility in place. But a lot of it is about setting the tone from the top, so having role models. So female leaders or leaders who are parents who are demonstrating they're doing that, um, that it's okay to just what I described, kind of leave the office at 5pm or go and pick your kid up. Both male and female leaders need to demonstrate those behaviors and that it's okay. It breaks that, um, perception that to get a role like that, to be in a senior leader position, you have to be chained to your desk till 7, 8pm at night.

James Roach: And what about coming up through the ranks though, because you'll have worked really hard, big four training, um, and then into, into industry and probably trying to earn your spurs and show people what you're made of. Um, what advice have you got for those people though, that probably feel the pressure to. Now I've got to work long hours, I've got to deliver if I want to get to cfo.

Kate Cooper: Yeah, I think, um, that was something that held me back personally for quite a while actually. Um, particularly after I returned to work, um, you know, from maternity leave after my youngest. I knew that was my last child and you know, I wanted to kind of get back on the, um, journey and heard other people even say out loud and had the perception myself that, you know, it wasn't possible to be a mother in the sense that I wanted to be, be a present mother and be available and get a role like a cfo. And I reached a crossroads in my own career where I felt I can either accept that stereotype, that perception, accept that reality, um, and kind of stick where I am, or I can prove them wrong. And um, I chose the latter. Um, and I think we need more women to step up and be those role models to show that it absolutely is possible. Um, it's not easy, but it's absolutely possible for any parent or person with caring responsibilities or any other responsibilities outside of work to do both.

James Roach: Do you feel you've had to do things differently as a woman in a senior role?

Kate Cooper: Um, again, I think there's a kind of, there's a bit of bias and there's a stereotype. I think if you ask most people if they thought of a cfo, what image would appear in their minds? Um, and it could be a particular stereotype for that. And I think sometimes people expect you to live up to that stereotype. They're comfortable if you are. Maybe FDs. CFOs are often seen as a bit cold and rigid and I think people expect you to be that way. And if you're not, they're a bit kind of uncomfortable with that and taken aback. Um, but I like to think I can show and show others that, you know, you can lead with feminine qualities and those feminine qualities actually add a lot of value to people, the organization, and there is a different way to lead.

James Roach: So changing tack onto the work that the IAD are doing and also how it ties in with what you're doing. Um, on the governance front, um, what are you seeing that businesses are still getting wrong on that side of things?

Kate Cooper: I think the thing to recognize is, um, being your board of directors, being a company director. Is a different role, it requires a different skill set. Um, you would never hire an FD who wasn't a qualified accountant. So why on earth would you hire a CEO or a non executive director who wasn't really qualified to do the role? Um, and that's where we as the Institute of Directors come in. Um, we do have a qualification which gives directors the knowledge and skills that they need and experience that they need to kind of fulfil their roles effectively and um, be better directors. Now it's not a mandatory qualification of course but um, it does give you that um, kind of gravitas and um, uh, demonstrates that you've got the right skill set. So as an employer or as a you know, um, somebody, a company looking for neds, um, on the board, that might be one way that you can demonstrate your experience and that you're going to bring that good governance to the organization. I think um, companies often mistake governance as being a bit of a legal thing, a requirement, a compliance thing, tick in the box exercise. But actually it adds a lot of value to the organization. I try to think of our board as a group of really smart, really clever consultants who I'm accessing for free essentially. Yes, the time or the fees that we pay, what have you. But having a group of you know, really experienced experts supporting you. Yes, challenging you but giving that, bringing that insight and that input into the direction of the company is really valuable and something that should be embraced.

James Roach: So um, that you mentioned about, it's uh, hopefully bureaucratic may be viewed by some certainly founders scaling businesses up like mad. Oh, have I really got to do this? Have I really got to do that? Do you think it can be turned on its head then to almost be a competitive advantage in some way?

Kate Cooper: Yeah, definitely I think. And I've worked in um, small businesses as well. Um, my last role was FD at uh, a startup that was going through high growth period. And I get that, I understand that governance is another thing to do. It's something that you've got to do on top of everything else and you really just want to be focused on growing the business. Um, but I think demonstrating good governance in an organization is really attractive to investors. It gives that credibility. Um, if an investor is looking at a uh, business and you can demonstrate you've got the right processes, you've got that good governance in place, that's going to take a lot of risk out of it for them. Um, and there's value in that. So it's definitely something to consider. I do think though One size doesn't fit all. Um, it's got to be proportionate to the size of the organisation. Um, and um, it's got to add value. Um, and you know what I was saying earlier around actually viewing a board of non executive directors as those kind of advisors, consultants, um, sounding board for the executive. Um, seeing it in that way, particularly in small organizations, you can um, appreciate the value a lot more I think.

James Roach: And what about the CFO and the board then? How do you see that relationship you mentioned? You've got them there as a sounding board and people that you can go to for great insights. What does that relationship look like day to day?

Kate Cooper: I think the CFO role is really important to the whole board dynamic. Um, you're sat there next to the CEO, you're a partnership, you present an aligned um, front, uh, around the board table, but you're also there as a check and balance for the board. So I think um, you know, you're often the voice of objectivity. Um, you know, you're, you're bringing assurance and credibility to um, you know, presenting together as that executive team. And um, and I think the non executives around the board table really rely on that um, check and balance for the executives. So you're kind of in a bit of a schizophrenic role as the cfo. You're there to support and um, stand beside the CEO, but you're also there to add credibility.

James Roach: Okay, and how do you use those neds though, to sometimes get what you want done? Do you find that conflict sometimes? Does that come into play where you think I need to get this through but how am I going to get there?

Kate Cooper: Yeah, definitely. It's natural, isn't it? The natural tension between the executive and the non executives. Um, but it's important to recognize that they don't have the information I have, they don't see everything I see. And they're looking at it from a different perspective. Um, but it's about giving them enough information they need so that they can make the right decision and guide things in the right way, but also respect that they're looking at it from a different perspective and they're seeing the things I'm not seeing. Um, so taking on board their feedback and um, their perspective is really important as well.

James Roach: Helping you see the blind spots, I suppose.

Kate Cooper: Yeah.

James Roach: Talking on um, ethics. So ethics is obviously with the ESG. It probably wasn't something we talked about 15 years ago necessarily, was it? But now it's really front and center within businesses. Um, what, uh, do you think the role of the CFO is in setting the ethical tone, if you like, of the organization?

Kate Cooper: Yeah, I think in the CFO seat, you really play a pivotal role in being that you're one of multiple roles who are kind of the ethical gatekeeper, um, in an organization. And, um, it's important to have that perspective. Um, all opportunities might be great opportunities, but, um, what we can bring, and it's inherent in our function as well, ethics runs all the way through the, um, accountancy industry and it's something close to our hearts and what we're used to looking at and we bring that different perspective into things. So setting the guardrails, making sure that we are operating ethically and we're not, you know, chasing opportunities that might create risk over here.

James Roach: Um, and when it's unpopular, um, doing the right thing ethically. Have you faced that kind of situation where, actually, I know we need to do this, but it looks like we probably should do that. Doing the right thing is going to be really unpopular?

Kate Cooper: Yeah, I think that's a common occurrence for most finance folk, really. You know, you don't want to be seen as a blocker and it's all about the way that it's communicated. And, um, you know, I think any risk can be turned around into an opportunity. It's just about how you tell it, really. Um, and sometimes you need to make those tough calls. Um, and it's important to do so because if nobody else in the room is going to say it, it's got to be you who says it. Um, and you've got to bring everybody along with you on that journey.

James Roach: Is there a, um, point at which it becomes too much? I mean, we. I'd cite an example where I knew a CFO that was in a business and, um, commercially they'd made a decision as a board that, um, probably made sense. Ethically, it didn't sit right with the CFO at all. Um, and so they, in the end, they left, they said, right, I'm walking away from this. Do you think there comes a point where it becomes no longer tenable, or do you have to go along with what the board is deciding, even if you feel like ethically it's not right?

Kate Cooper: I think particularly in the CFO role, you need to take a balanced view. I think the CFO role sits so much across the whole organisation, very much like the CEO role does, um, from a different perspective and different angle. Um, and I think the board does look to the CFO to, um, bring that perspective and make that call. So if I was in a position where the whole board was agreeing to something that I felt was absolutely unethical, I'd like to think I would do the same. Um, because, and it would be a shame to get to that point and I think more for the board who haven't taken note of that perspective, because you do need to take that balance view. Um, but it can't all be about compliance. It's got to be a balance. If you were completely compliant on everything, you'd never get anywhere.

James Roach: Right? I'm going to quote you on that. So over the next decade then you obviously see the role of the board and the exec and you're really close to that. How do you see the role of the CFO evolving over the next decade?

Kate Cooper: Say I think, um, it's evolved quite a lot over the last five to ten years already. Um, I think the CFO role is blurring lines with the COO role a lot. I think the responsibilities of the CFO are broadening vastly outside of just um, finance, uh, particularly in smaller organizations. And that makes complete sense because actually finance do a lot of operations. A lot of the skills are transferable to different areas. Um, and we do look across the whole organization. Um, obviously as ah, technology advances, AI is rapidly coming into play and everybody's trying to catch up. Um, the role, you know, how things work and how the finance function works will evolve rapidly. Um, I think it's so much more focused now on the future and that FP and a side of things, commercial finance support is becoming a much bigger part of um, what we're doing. Less so, kind of looking back and reporting on the past, um, so judgment kind of insight and um, giving that whole organization perspective I think will continue to grow in the CFO role.

James Roach: Yeah, I mean obviously no conversation is complete without talking about AI in finance at the minute. I mean it's getting lumbered on the CFO's desk I think fairly routinely. Certainly in small medium organizations where they might not have a CTO or someone looking after um, data. Is it the right place?

Kate Cooper: I think it depends on the organization and where it sits. So in my role I also have responsibility for it, HR and risk and compliance. So kind of quite abroad as well as finance, of course, um, quite a broad remit and I think there are a lot of transferable skills there. So in finance we're used to managing data, implementing controls around that data cleansing data and data quality, um, and embracing tools. We've actually had quite a lot of tools that are AI enabled AI driven, um, for quite a while in finance. I think out of all the places for IT to sit, if you don't have a CTO or a, um, IT director, uh, it is a logical place for it to sit because of a lot, a lot of the skills are transferable. But I wouldn't make the mistake of thinking your CFO is an AI expert, um, and absolutely get some external input if you don't have that.

James Roach: Yeah. Okay. So that it's not a dumping zone. Um, the CFO desk. What advice would you give to CEOs of how best to. Or how to get the best out of their cfo?

Kate Cooper: Yeah, I think that point around a dumping ground is quite pertinent because often if there's a ball dropped or you want a safe pair of hands or a trusted partner, it often will be the CFO that picks it up. Often we're quite happy to pick it up because we just want things to work well and we just want things to be controlled and work all nicely. And it's definitely something to watch because, um, I think also kind of in the central services space across any of the support functions, there's also a temptation not to kind of, you know, you want it to be a lean operation. You don't want to have loads of people, um, in that area, you want to focus on the kind of revenue driving areas of the business. So it's really important that CEOs listen to their CFOs around what is possible and what's not possible because you're going to start compromising on quality if you get that wrong. Um, and I think the relationship between the CEO and CFO is oh, so important and even more so now. I think we talked about the CFO remit broadening and I think even now even more so, um, that partnership and leadership across the two roles is so much more important and is really becoming, um, coming into the fore there, um, CEO and CFO leading together in partnership rather than kind of one henchman at the top. Um, and I think that's a good thing. It really brings balance to the executive.

James Roach: Are the roles becoming a little bit more interchangeable, do you think, or.

Kate Cooper: I don't necessarily think CEO and um, CFO are becoming more interchangeable, but I think CFO roles are becoming more akin to COO roles. Um, and it's bringing that whole organization perspective from a different viewpoint. Um, that internal focus and seeing the things that the CEO isn't necessarily seeing, being a bit closer to the ground and you know, hearing and seeing things they're not necessarily, um, exposed to. So that's why the partnership works really well, um, because equally they're, you know, looking at externally, often looking at those growth opportunities and the balance between the two roles works really well.

James Roach: I've bombarded you with questions. I've just got one left, um, which we ask everyone, and you'll no doubt have a great answer for this, but what, what is it that you've seen in the great finance people that you've worked with over the years that you wish more people knew about?

Kate Cooper: I think it's that, um, finance people often get put in a pigeonhole. Um, but finance people are great operators. We're great at implementing, spotting inefficiencies in processes, be them finance processes or otherwise. Um, we're great at managing data even when it doesn't have a pound note sign in front of it. It's the same skill set. Um, I think that often means that we're pulled into things we maybe shouldn't be pulled into, or we, um, compensate for others, um, areas where they might not have the right skills around that. But I think what I'm saying is finance folk have a much wider range of skills than we maybe give them credit for. Um, and, you know, tap into that, utilise that skill set because it's really valuable.

James Roach: Thanks very much, Kate. Thanks for joining us. See you next time. Thanks for listening to the finance seat. Before you go. Please do take a minute to rate and review. It makes a huge difference. And make sure you give us a follow so you know when the next episode is out. See you there.