From the Frontline of Finance: Decision Making in an Uncertain World
6th May by Nigel Armitt
What’s it like managing the finances of a charity that stretches across the globe in this current crisis situation? Following on from our interview with Director of People and Learning Roger Smith last week, we look at tackling the impacts of Covid-19 from a financial perspective with Nigel Armitt, Interim Chief Financial Officer at Amnesty International.
Nigel was placed at Amnesty nearly 12 months ago via AAW’s Interim Service. Nigel’s long and highly successful international career in C-Suite roles has been characterised by his strength and agility in an emergency or crisis context including many financial turnaround situations.
He’s specialised in providing leadership and support which is shaped by disruptive and often highly exposed environments. Hence, he has typically been drawn to short term interim assignments, working with organisations that are often in financial distress or have gaps in personnel or expertise. For Nigel the fact that he can bring his skills and knowledge to address these challenges is something he is both proud and passionate about.
The CFO role at Amnesty International is a new role and Nigel has been a great choice to ‘road test’ its effectiveness. With responsibility for finance, worldwide security, IT and legal, the CFO is at the very heart of the organisation’s operational response to the greatest crisis our generation has ever faced.
We can honestly think of no better person to have on your Executive Team during COVID 19!
In this interview Nigel reflects on how he has led during this period and how he has drawn on his vast and varied experience to help the organisation foster a path towards recovery.
What was your first reaction to the impacts of Covid 19 on your operations?
As the bulk of my career has been focused on troubleshooting in times of crisis, none of this was new to me; it was exactly the same as being in a turnaround situation when I’m parachuted into an organisation that is in major financial stress and you have to act quickly, make decisions and move forward.
Number one on my action list was, of course, cash. What do we need to survive the next 12 months? What are our short-term priorities, so that I can model some cash flow scenarios to share with the leadership team, bank and Finance and Audit Committee?
At the very start of the crisis situation my leadership priority to the organisation was also clear and vitally important. As the organisation’s first CFO, I have to inspire confidence and trust. Staff need to hear a guarantee from me that payroll this month will be met and suppliers will be paid on time. These two elements were forefront in my mind.
Teams also need to be supported practically. Such unchartered territories cause great anxiety and ensuring that we have for example the right IT infrastructure in place for homeworking can alleviate tension early on. Plus telling teams early on what are the TOP priorities.
What has been the main financial implications of this crisis for Amnesty?
The main impact is going to be longer term, as this year’s programmes are funded by last year’s fundraising income. COVID 19 will affect our financial modelling from 2021 onwards.
Our model is also dependent on different sections (country offices) paying Amnesty International in London a certain percentage of their income, after they have deducted fundraising costs. This means we haven’t been as badly affected as some other charities. Hong Kong, for example is coming out of the other side of the Covid restrictions and we are starting to see an increase in income there. The US in contrast, is forecasted to be particularly negatively impacted due to its reliance on face to face income.
Impact on our income will also depend on how successfully income generation adapts to the current challenges: for us the decision is not just about cutting or reducing fundraising costs but thinking about how we can spend in a different way. For Amnesty, this meant switching acquisition for example from face to face to telemarketing. As with lots of other charities, pivoting to a different more relevant channel rather than just stopping, should prove to be the right decision.
The impact of Covid on Amnesty across all our country ‘sections’ and on charities generally, will depend on good financial health and on the cash balances they have built up – if you have sufficient reserves and a strong Cash Balance, then you will be able to weather the storm.
Covid-19 has forced many oganisations to make tough decisions – do we furlough staff? Do we make some staff part-time? Do we ask them to take unpaid holidays? Or as a last result, do we actually make staff redundant.
Thankfully these are decisions that Amnesty International have not had to make. Everything depends on the length and the detrimental impact of the crisis on our sector.
How are you as an executive team leading the organisation during this crisis?
Communication is absolutely vital at the moment – for our staff, our stakeholders, our Board, trustees and also our Union.
Amnesty has a very connected and functional senior management team – we all talk to each other frequently and have regular catch up meetings.
As an international organisation we also have regular conference calls with the sections around the world, to keep them updated on and new developments in the current situation.
We have been careful to create measured messages. These need to be well thought out, fit for purpose and, for our international audiences where English might not be a first language, tested beforehand so that they are not in danger of being misinterpreted.
In my role, I also keep in close contact with our International Treasurer in New York and our Finance and Audit Committee. It’s critical to keep everyone informed to put their mind at rest that we are leading from the front, we’re taking all the urgent and necessary actions we should take.
Good communications and transparency in messaging also extends to the way we engage and involve our donors and supporters. I’ve just had a long call with an important donor who requested a chat with me. Donors need to know that organisations are in control. The role of the CFO is absolutely key in giving this confidence.
We’ve also had to grasp quickly how the UK government operates and understand the financial implications and legalities of the daily briefings.
These briefings are heard by everyone in real time, so it’s my role to be on hand to help staff understand the immediate impact of proposed actions so that there is clarity on implications.
Have you seen any positive impacts that have come out of this situation?
So far, home working for us has been very effective. I think key to this is the fact that our technology is working well, staff are engaged and we have regular catch ups including virtual Friday night drinks and weekly quizzes. Leaders need to work harder than ever to ensure that staff are supported and engaged. Getting this right and creating a wealth of goodwill in the workforce will be so important to longer term recovery.
Everyone’s level of IT skills and ability to use virtual tools have vastly improved. I also think this crisis has made us all think about how our organisation should be structured so that we are more resilient, if something like this happens again.
We’ve also had to up our game in terms of increased intra-departmental communication and inevitably this has helped break down institutional silos. This situation has forced us all to connect and forge a mantra of integration, collaboration and joint working across teams and departments. All of this can only be a good thing!
What are your next priorities?
It’s trying to navigate and plan for the future Amnesty International. When approaching our more forward-thinking plans, we have to hope for more clarity on how Covid-19 affects us as an organisation and the geographies that we operate in.
However, I also think we just have to face up to the fact that these will be ambiguous times and that uncertainty could be the ‘new normal’ The worse thing we could do is just sit still and freeze decision making.
So, we have to adapt to each twist and turn and try and make the best decisions with the information and experience we have to hand. We know that post crisis, the organisation will look different and it’s important that we start to think ahead about potential new structures and funding models now.
As I come to the end of my time with the organisation, it is clear to me that Amnesty really does operate like a family. And as with our home lives, an agile organisation that pulls together and shares the load plus innovates will survive and thrive in the post COVID 19 world. Whatever that looks like.