Multiple UK credentialing blunders highlight the importance of CFO honesty

In corporate finance, where accolades can define skill sets and leadership potential, competition may tempt some leaders to exaggerate their accomplishments for reasons such as reputation, securing a desired role or keeping up with competitors.

In the recent cases of John Wood Group CFO Arvind Balan and Chancellor of the Exchequer Rachel Reeves, two U.K. finance leaders — the latter of whom is the top finance official in the U.K. — both were caught misrepresenting their work experience for unclear reasons. However, both cases highlight how stretching the truth can snowball into public relations nightmares and potentially be career-destroying, even for the highest-ranking finance leaders.

For Reeves, an extensive timeline compiled by The Spectator shows how a small exaggeration in a 2021 media interview about her work experience spiraled into recent widespread calls for her resignation. 

According to multiple reports, Reeves exaggerated aspects of her professional history, including the length of her tenure at the Bank of England and the nature of her role at Halifax Bank of Scotland. Initially, she described spending a decade at the Bank of England, but records showed this included time spent earning a master’s degree. Similarly, her LinkedIn profile previously listed her position at HBOS as an “economist,” though reports suggested her role was in retail banking rather than a technical economist position.

Throughout November of last year, her attempts to revise her LinkedIn work history were tracked, leading to further scrutiny. An additional investigation into her background later revealed she may have also overstated the number of bylines she had published and misrepresented the prestige of the journals that ran her work. Her involvement in and disclosure of an investigation into her expenses at HBOS were also looked into by the BBC.

When questioned about the discrepancies, Prime Minister Keir Starmer downplayed their significance, stressing that they occurred “many years ago” and highlighting Reeves’s dedication to tackling the economic challenges inherited from the previous government.

In regards to the accusations around her expenses, Reeves denied any wrongdoing to Sky News, saying “no one ever raised any concerns about my expenses when I worked for Halifax Bank of Scotland,” and “I submitted, had processed and had my expenses signed off in the proper way as you would expect, and no issues were ever raised during my time at Halifax Bank of Scotland.” Reeves’ legal team has also denied all accusations of wrongdoing. 

Wood Group’s leadership shake-up comes after the company announced it expects $200 million in negative free cash flow in 2025, a considerable shift from earlier positive forecasts. On top of that, it is conducting an independent review of its financial transactions and governance. Balan stepped down after it was discovered he misrepresented his qualifications, calling himself a chartered accountant instead of a certified practicing accountant. Following this revelation, the company’s stock fell 40%.

After the Financial Times investigated Balan’s past, it found he was not a chartered accountant as stated on the company’s official website. Instead, as his LinkedIn profile accurately noted, he was a certified CA in Australia. He referred to the misrepresentation as an “honest oversight” and resigned as a result of the findings.

“I continue to believe in the long-term potential of the company and its people,” he said in a written statement. “My decision is based on minimising distraction at this very pivotal time with our investors and lenders”.

Chris Argent, founder of GENCFO, one of the largest CFO leadership groups in the U.K., said this is a pressing issue that CFOs and human resources departments need to address, as accounting credentialing varies by country and is complex.

“I think it is very common for accounting professionals to debate their designation, whether I am qualified, chartered, certified or experienced to do the job, let alone HR professionals who may have less of a handle on the relative nature, strengths and weaknesses of a qualification,” Argent said.

“In senior leadership, qualification history is only a very small part of the leader’s offer, so I would treat it with the same respect,” he continued. When asked about how to avoid similar situations in the U.S., he said “[It’s important to determine] if it’s simply an error or a misunderstanding, or is it a lie? And more importantly, does it affect the role, credibility and trust of the individual? Let’s not forget there are many CFOs without an accounting qualification to their name.”

Argent said CFOs should ask during the interview process what types of accounting and academic certifications a company requires to avoid discrepancies like those Reeves and Balan encountered. “During the interview process, CFOs should work with HR on what it means to be qualified [for the role] today and whether an accounting qualification is essential,” he said. “If something is found to be wrong or amiss [on your team as a CFO], be proactive.”

Article originally posted on CFO.com