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Editor's Viewpoint - Diageo CFO to North America? Do the Math

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Yesterday's appointment news from Diageo has echoes of a similar HR switch at SABMiller two years ago - a question of perceived suitability.

Deirdre Mahlan will replace Larry Schwartz as president of Diageo North America later this year

Deirdre Mahlan will replace Larry Schwartz as president of Diageo North America later this year

Earlier this week, Diageo announced that its group CFO, Deirdre Mahlan, will move later this year to become president of Diageo North America. Mahlan, who moved to London to head up Diageo's financial department in 2010, has worked in the drinks industry since 1992, having joined Seagram prior to Diageo's acquisition of the company in 2001.

Some may query the move, based on Mahlan's career thus far having been based in various accounts divisions. Diageo's counter-argument to that yesterday was that she knows the North American market well, having been CFO for the region prior to her move to London.

That argument doesn't hold water, though – that just means, surely, that she's previously counted North American beans rather than the group's beans, no?

Like SABMiller's appointment in 2012 of Sue Clark as head of European operations – her prior role was director of corporate affairs – yesterday's news may prompt queries of suitability to the new role. Like Clark's move, however, I can strongly vouch for Mahlan's suitability.

Put simply, what makes Mahlan the right person for the job, in my eyes, is that she is one of the most switched-on executives that I have met in my time covering the drinks industry.

There may be some analysts that will query the move, but I know at least four who will join me in praising it. Three years ago, at Diageo's investor conference in Miami, Mahlan held court to myself and these aforementioned analysts at a dinner. As we ate, Mahlan handled every question – including less geeky, more market-related ones – with great grace and impressive aplomb. "She's not very… finance-y for a CFO," one analyst told me afterwards.

Another time when Mahlan impressed came late last year when I spoke to her following Diageo's divestment of Bushmills and subsequent full purchase of Don Julio. During our time on the phone, she gently admonished me for having suggested that Diageo had admitted defeat in the Irish whiskey sector, while also admitting that Pernod Ricard's Jameson, with 68% global market share, "has transcended the category".

Again, not very finance-y.

Where wobbles may be felt, meanwhile, stem from Diageo not yet having a replacement CFO lined up for Mahlan. That said, she won't be heading home to the US before the end of this year.

And, with North America representing 45% of Diageo's group operating profits, Mahlan will have a whole lot of beans to keep her busy.


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