Summer, 1985. The meeting of the European Union’s heads of state was fraught with tension — uncertainty over the integration of new members, rampant speculation about the future of state subsidies to ailing industries, and unresolved arguments over the political and economic union. Meanwhile, unemployment had reached record levels in many parts of Western Europe, and national governments were beginning, reluctantly, to adopt a doctrine of austerity, deflation, and reduced interventionism. Amid all this, internal borders were melting, bringing Corporate Europe closer than ever imagined to unified financial markets.
For finance chiefs, 1985 would prove a pivotal year, thanks to the decision by the London Stock Exchange to liberalize its membership and pricing rules. Ten years after “May Day” at the New York Stock Exchange, London opened its exchange to foreign firms. Equity trading in Europe was on its way to becoming more international as currency controls faded and investment funds grew more mobile.
Europe’s CFOs were also becoming more mobile. With the new competitiveness of Europe’s capital markets and the advent of U.S.-style takeover tactics, deal making grew more global and more complex. Little wonder, then, that companies from London to Luxembourg began calling on their finance chiefs to play a larger role in deals not only in Europe, but also further afield.
Yet by the time the first issue of CFO Europe was published in 1998, Europe’s finance chiefs were only just beginning to break free of the accounting role for which they were known. Few were being invited to take a seat alongside their CEOs at the strategy table, while spending time in such key areas as investor relations was unheard of. That’s changed today.
And what can we expect when CFO Europe celebrates its 20th anniversary? Some would argue that the EU’s evolution will still be dogged by variations of the issues that held it back in its early days. But we don’t think that the evolution of finance will be similarly constrained.