Roy Waight FCMA, executive vice president of finance at Shell UK talks to Insight about CIMA training, business partnering and the main challenges ahead for the oil giant. By Camilla Berens, freelance journalist.
How has the downturn affected your finance graduate training programme?
The short answer is that it hasn’t. This year, we will take on about 250 graduates in Europe and that’s typical for our annual intake. There are slight changes from year to year but that’s dictated by our long term talent pipeline requirements.
How do you retain your finance talent?
Our training is less structured than many of our competitors. Our philosophy is that, when people join a company, they’re keen to start doing something that gives value immediately. So we’ve always given people what you might call real jobs right from the start. Our approach is flexible and challenging and it seems to work. Its success is attested by our low attrition rate.
How does CIMA fit into this approach?
CIMA provides our graduates with a broad understanding of management issues, marketing issues, process issues, IT management theory, management accounting and financial management. So what they get is close to an MBA - except that the CIMA qualification is more thorough. A good MBA might give you some good contacts but it doesn’t provide the depth of understanding or the financial skills that are at the core of the CIMA syllabus.
What is Shell’s approach to finance business partnering?
Business partnering has always been embedded in Shell’s structure but we call it ‘finance in the business’. The added value is colossal: everything from making sure you shape contracts properly to understanding the drivers of value. All our major projects have accountants with appropriate skills embedded in them.
How do you maintain financial integrity with business partnering?
There is a danger of what you might call ‘going native’, when finance people start to believe the effusions of marketers, for example, and end up letting the side down. The way to avoid that is through the reporting relationship. However much these people work in the business they report through the finance line to the CFO. Their staff reports are written by their finance colleagues, their bonuses are determined by their finance colleagues, etc.
Secondly, we have a management control framework combined with rigorous assurance practices. So we have good, thorough, assurance in place. But I think the most important thing is control at the top. I have a controller community that goes across the world and when I meet with them by phone every month we continually reemphasise the fact that good controls start with good accounting. You only have to look at Enron to realise what happens when you drift away from that.
What are the main challenges ahead for you and the company?
Keeping up with changes in the regulatory framework can be challenging. For example, recent legislation on bribery and corruption places a heavy burden on the company to make sure that no one breaks any rules. Although we have rigorous controls and assurance processes in place, it is ultimately difficult to be absolutely certain that no one, anywhere, will do anything wrong.
Personally, I will have to look at the whole area of risk. Next year, there’s a change to the UK’s Combined Code and boards will have a more explicit obligation to address the risk appetite of the company. Exactly how we help them to do that is something I need to work out over the next few months.
Have we reached peak oil, (the point when the maximum rate of global petroleum extraction is reached)?
Ever since I was a lad, we have been about to reach peak oil and 40 years later we’re still talking about it. But Shell added 3.4 billion barrels of proved reserves in 2009 and there is a lot of talk about shale gas in North America. It’s true that easy oil and easy gas are becoming harder to find, but as technology develops, we discover new things.
Has Shell been concerned by criticism from environmental groups about the extraction of oil from tar sands in Canada?
We know the development of Canadian oil sands resources has received increasing attention from shareholders, the media and non-governmental organisations. We understand their environmental and economic concerns and are committed to ongoing dialogue. But, to put oil sands in perspective, it currently equates to only 2.5% of our total production and Shell is not reliant on oil sands for future growth.