Andrew Griffith, Sky’s CFO of seven years, explains how IR played a vital role on his way to the top finance job
Is there such a thing as an investor relations gene? That’s what one may wonder upon learning that Andrew Griffith, CFO and former IRO of British media giant Sky, is the brother of Chris Griffith, Tesco’s head of IR. ‘Please don’t make too much of it!’ jokes our interviewee, who is the elder sibling.
A chartered accountant, Griffith joined Sky in 1999 from investment bank Rothschild, where he had been working in M&A for the media sector. He was recruited for the position, which was, he says, ‘a fairly unstructured role’ combining corporate development and IR. A smaller but fast-growing element of the media landscape at the time, BskyB – as it was then called – was looking for ‘someone who understood the City and could help the firm with transactions when it did them,’ Griffith explains. ‘I was keen on the company so I was flexible about what role I took.’
Over the following nine years, Griffith saw a large number of responsibilities added to his remit, including treasury, tax and group finance, before moving up to deputy CFO and eventually making the top finance job in 2008, ‘the youngest CFO in the FTSE 100 at the time, and now one of the longest-serving,’ he points out.
The emphasis on communication clearly gained from IR is an invaluable skill for his current job, Griffith explains. ‘All big CFO roles these days involve a lot of communications: with internal staff, with the market, with the board and other stakeholders, whether it’s the government or suppliers,’ he says. ‘A lot of newly appointed CFOs have to learn IR as part of the appointment for the first time. It’s one of the areas I didn’t have to master.’
Team player
Sky’s IR team comprises three to four people, a blend of ‘internal, typically finance people who know the business very well and people with a bit of external experience’, including former corporate brokers. Asked whether he believes former sell-siders are a good pick for a role in IR, Griffith offers a nuanced view: ‘Good knowledge of the sector can really help, but the skills needed can be quite different. As an IRO within a company, you need to get on well with a broad variety of people, whereas as an equity analyst you are typically interacting with a much narrower range of people; people who, like you, are often very sophisticated, intelligent and knowledgeable about the financial markets.’
Sell-siders also aren’t used to running a team, ‘at least not a big one,’ says Griffith, remembering that the IR department had indeed at one point hired a former media sector analyst who subsequently developed a successful career within the group. ‘Our IR department, although small, deals with a lot of fast-moving issues because there is a lot of technology in our sector,’ he continues, citing as competitors big names like Apple and Google. ‘A company like Sky is probably in the press every single day, so that makes for a lot of news flow.’
The firm is also one of the fastest companies in the FTSE to report its accounts, putting out its full numbers within three to four weeks of the quarter end. ‘That’s a challenge for the team,’ Griffith admits, adding that following the end of mandatory interim management statements, the volume of quarterly announcements has been reduced. ‘We still see those as a valuable chance to provide a quick update on the key performance indicators. We’re not going to stop quarterly communications entirely because our business is quite fast-moving, but we’ve taken the opportunity to slim it down.’
While the IR team does most of the roadshows, Griffith and CEO Jeremy Darroch attend a large number of conferences, including yearly essentials such as the TMT conference held by Morgan Stanley in Barcelona and the Communacopia conference held by Goldman Sachs in New York. ‘We have a very international share register, with a lot of US-based investors,’ Griffith explains.
Because his career led him up through IR, his role is still, in effect, one of an ‘IR super-head,’ Griffith explains. ‘I’ve never really lost the responsibility for IR and have been looking after it for 16 years now, including during my eight years as CFO.’ The success of the IR program and appraisal of its team, including the IR head, is determined subjectively by Griffith, who takes into account both perception studies and feedback from colleagues and investors.
Challenging times
Griffith recalls his tenure’s biggest challenge: 21st Century Fox’s attempted takeover of BSkyB in 2009. ‘It lasted for two years and, like all hostile bids, there was a huge amount of public scrutiny,’ he says. ‘Our objective was to be even-handed to all stakeholders, including Fox, which had always been a supportive shareholder, as well as the independent investors in the company led by names like BlackRock, Capital Group and Fidelity.’
BSkyB eventually acquired the Sky businesses in Germany and Italy from Fox in a £7 bn ($11 bn)] deal in November 2014 – ‘one of the biggest ever TMT pieces of M&A in Europe’ – which has transformed the UK-only company into one that operates across continental Europe. ‘We received 96 percent approval from shareholders supporting the deal,’ Griffith enthuses. ‘This was the year’s big highlight and also its biggest challenge.’
Griffith’s advice to IR professionals aiming for a CFO’s seat – almost a third view this as a possible career path according to IR Magazine research – is to gain broader experience within the business. ‘It’s hard, if not impossible, to go directly from being an IRO to a CFO,’ he says. ‘You need to have a lot more experience in an operational part of the business, and by that I mean within finance. Other than that there are lots of helpful aspects you gain in IR, such as understanding how the capital markets work and being very much involved in the formation of the company’s strategy. All of those are very positive attributes if you’re aiming for a CFO role.’
This article appeared in the fall 2015 print issue of IR Magazine