Infratil chief financial officer Phillippa Harford
Phillippa Harford believes the key to being a great chief financial officer is keeping your eye on the long-term goals while also being mindful of the short-term challenges.
It’s something Harford, who is CFO of Infratil, has had to keep on top of while the company has continued to invest through the Covid pandemic while managing its portfolio of companies.
“The thing I’m proudest about is obviously we have got quite a diverse portfolio and businesses were being impacted by Covid quite differently. We had from one end of the scale - are people going to be able to pay their power bills to Trustpower to the other end of the scale which was; are we going to have residents in our retirement village dying?”
As well as being CFO Harford is on the board of Wellington Airport and Retire Australia - two of Infratil’s investment companies.
Harford says she had to be calm and make sure the company delivered regular and timely information to investors.
“The last couple of years we have been navigating how you keep the market abreast of what is going on. What we feel are the risks and opportunities as well. We got really good feedback on the way we communicated to all of our stakeholders through that and that includes the portfolio companies because a lot of them would have been saying; “oh we don’t know if we are going to be able to pay dividends” - well okay we probably need to have a bit more detail than that, accepting that we all don’t know how Covid is going to play out.”
Harford became deputy CFO in 2013 and CFO in 2015.
Covid hasn’t stopped the company from doing big deals.
“That’s our DNA in a way. We are very focused on what we think we can achieve for Infratil shareholders and we see opportunities out there. We have progressed with our renewables platforms in both Asia and Europe - a fascinating time to be doing that given everything that is going on at the moment with supply and energy sufficiency.
“That’s one thing about Infratil - I have been working at Morrison and Co for 14 years - it doesn’t stop - I think we have grown from a market cap of about a billion to $6.4 billion now. By definition that’s a lot of activity.”
Vodafone is its largest, most recent investment but it’s not the most valuable investment - that’s Canberra Data Centres.
“We acquired that six years ago now. But Vodafone definitely was the biggest acquisition and going back to that it was all about managing the financing of that acquisition - that’s been the largest one. But in terms of the portfolio, we have also got Longroad which we did a capital raise for.”
She said Covid had made raising capital trickier.
“We did a capital raise in June 2020 so that was right in the midst of Covid. We went out to say this is what we are going to raise capital for and we want to basically have reserve capital so we can deploy it. And that’s exactly what we went about and did. We have got a good track record with the market. We are very mindful of when we go to the market and what we go to the market for.”
Harford says winning the award is more about recognition of Morrison & Co and Infratil than any gratification for herself.
“I’m really proud of what we have achieved and our team and it goes from top to bottom. We have got a board that challenges and supports management at the same time and we are all invested in giving, trying to provide really good outcomes for shareholders.”
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The judges said Harford had been an effective team leader for the finance function and had been central to developing judgements and strategies on complex international tax and accounting issues and financing structures linked to Infratil’s international investment footprint.
“Phillippa has been called out by management, the board and the market as a leading CFO and a key executive behind Infratil’s success and superior return to shareholders. She has made key contributions to the company’s acquisitions and divestments such as Vodafone, Tilt Renewables, and Long-road Energy, all of which have helped to drive value for Infratil.”
Finalist: Jo Allan, CFO Foodstuffs North Island
Jo Allen says the way Foodstuffs staff stepped up to ensure the co-operative could keep supplying food to the public during the pandemic is one of the things she is most proud of as chief financial officer.
“Over the last couple of years we have been running at pace, operating in a crisis mode due to the pandemic and I think from my perspective - not just down to my role as CFO - but seeing Foodstuffs as a co-operative and as a team come together and deliver for NZers - ensuring we have got food on shelves and able to look after NZers through what has been a pretty challenging period across the board.
“It was a really cool time to feel like we were contributing to something that was really important to our customers. That’s something I’m really proud of.”
Allen says the demand was such that even she and her finance team were roped in to unpack containers, stock shelves and pack orders for online shoppers.
She says being a good CFO is about having a really strong customer orientation.
“It starts with knowing your customer, ensuring that investments are based on what our customers are wanting and that are going to create a clear outcome for the customer. It’s easy when you work in food retail because we are all customers.”
It’s also about having a growth mindset, Allen says.
“It’s not just about the numbers, looking backwards and making sure the numbers are right but the CFO has to have the ability to step away from that and focus on the broader strategic issues that the company is facing and most importantly to support the execution of the company’s strategic objectives - that I think is critical and the CFO has a unique view, it’s a birdseye view of the organisation.”
Allen has been with the company since 2017 but began her career as an engineer at Glenbrook steel mill before moving into analysis and finance roles in the fast-moving consumable goods sector.
“You don’t need to be a qualified accountant to be a CFO - coming back to what makes a good CFO - yes you have got to make sure the numbers are correct but it’s much more of a strategic role now than it has been and so I think if you look around CFOs of big organisations now there are a lot more people that are from diverse backgrounds than there ever have been.”
The judges said Allen was a well-respected CFO that is highly intelligent, competent across the numbers, but with a thorough understanding of key strategic issues.
“She is also seen as a gifted team leader, operating with a demanding yet compassionate approach.”
They said Allen had also had a significant impact in steering Foodstuffs through a particularly challenging regulatory landscape, including the Commerce Commission review of the retail grocery sector.
“She is a leading example of a CFO who deeply understands finance and strategy and strongly supports the CEO and management in driving significant value.”
Finalist: Marc Rivers, CFO of Fonterra
Marc Rivers is proud that he is leaving Fonterra in good shape after five years of hard graft to turn the company’s financials around.
Rivers, who began as Fonterra’s chief financial officer in 2018 after spending 12 years at pharmaceutical company Roche, said some of the toughest moments of his time there were the losses the co-operative made.
“I was the first CFO to post a loss at Fonterra in my first year and then I topped that off with having an even bigger loss in the second year. That was definitely the low.”
But he always had confidence that things would get better.
“You know in your darkest hour that’s when the dawn is coming. The highest moments have been probably this earnings release for this past year. It was so gratifying to see all the fruits of all that pain and everything we went through.”
Rivers said one of the things he will take away from the experience is the importance of being really clear on your purpose.
“Why does Fonterra exist? It is a farmer-owned NZ dairy co-operative and so the big insight there was our purpose was to collect their milk and process it and make it valuable and bring the money back home. Once you start to drift away from that core purpose that’s when you start to get into trouble. And I think that is what had happened - all with good intention, I don’t think there was ever bad intention.”
That led to the sale of a number of non-core businesses it owned while then using the proceeds to improve the co-operative’s balance sheet.
Rivers said another lesson was the importance of culture.
“Something [Fonterra CEO] Miles really brought that I tried to bring is at least to have an atmosphere where people feel safe and that they can say what’s on their mind and what they think because the reality is the team had all the answers, they knew what was needed, they just needed to feel comfortable to be able to say what they think and then we could have real conversations and suddenly the light shines and you know how to go.
“The numbers bit is kind of the easy part. These other bits are the real lessons.”
Rivers said being a good CFO was about setting the tone from the top.
“The reality of the problems we all face now is they are so complex that there’s no problem that can be solved by one individual or by one function. All the problems we face are complex and require cross-functional collaboration to solve them and so it’s all about team effort.
“I think the most important thing that finance can do, the CFO therefore, is advocate absolute transparency, just shine a light on everything and hold a mirror up to everything so that we know what we are dealing with and then you have the best chance of being able to solve an issue.”
Rivers doesn’t have another job to go to but will chair the audit and finance committee of Te Whatu Ora / Health New Zealand.
The judges said Rivers was regarded as a highly popular and respected CFO by many employees within Fonterra and had high credibility among the co-operative’s farmers.
“Marc has been instrumental in the strategy of selling non-strategic and underperforming assets, and lowering leverage in the business to achieve a strong balance sheet, improved credit rating outlook and financial flexibility, with a renewed focus on excellence in the dairy milk and ingredients businesses that are most important to dairy farmer returns. The success of this strategy has been apparent in the last six months as Fonterra posted a record milk price alongside improving, strong earnings in both the 2022 and current 2023 years.
“Marc also had an impact on improving morale and restoring confidence in the Fonterra finance team.
“He is regarded as a highly popular and respected CFO by many employees within Fonterra and has high credibility among the co-operative’s farmers.”
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