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Looking forward has never been so important. In a world where risk and mitigation are key, and change is the only constant, being able to make effective, long-sighted decisions is crucial for businesses. For Rachel Gerrish CA, Managing Director of S&P Global Ratings, a division of S&P Global, that business vision depends on credit ratings – the heart of a company that has roots stretching back to 1860 when Henry Varnum Poor published a journal with data on the growing US railroad industry.  This laid the groundwork for the first credit ratings, providing investors with forward-looking standardised data on bond issuers’ creditworthiness.

“Ratings are forward-looking opinions about relative creditworthiness. We’re using common and transparent global language for investors to be able to compare the relative likelihood of whether an issuer may pay its debts on time and in full,” Gerrish says.

Forecasting is particularly important for sectors that are more uncertain and volatile, such as transportation, the area on which she is a sector lead at S&P. “When you forecast, you’re not going to get everything exactly right,” she says. “But it’s about trying to forecast a range of outcomes that would be comfortable within that rating level so that investors can then form a view on [those companies].”

Forward focus was ingrained in Gerrish from the start of her career. She chose accounting because of the opportunities she saw – “I thought it opened a lot of doors,” she says – and after graduating from Nottingham University, started at PwC in 2004. There she did her CA training, something she credits with teaching her the importance of thinking ahead: “I always turn up to meetings well prepared and with notes. I’m very methodical.” 

After three years working in audit, she joined RBS in 2007, shortly after its disastrous purchase of ABN Amro. It was a defining time for her career and her outlook. “The bailout of RBS wasn’t that long after I’d started,” she notes. “There were crisis meetings on the floor. But as with the more recent challenges of Covid, it’s at these times that you learn most.”

Change agent

It was this accelerated, intense learning period that Gerrish credits, in some ways, for leading her to the world of credit ratings. “We all became a lot more forward-looking in our analysis [as an industry] and put a lot more emphasis on forecasting and looking to the future,” she notes. “We realised even if you perform really well as a company one year, that doesn’t mean it will be the same going forward.”

S&P was a natural fit for her interest, but when she joined the company in 2011 her experience of this area was fairly minimal. “I’d used S&P ratings a bit in previous roles and I’d read its reports and was impressed,” Gerrish says.

She joined as an associate, first leading the European packaging portfolio, before moving to the oil and gas team to become the primary analyst on BP and Shell. A three-month secondment to S&P Global New York in 2014 and an immersion in change management highlighted to her “the inevitability of change”, she says, “My advice would be to embrace it – because it’s crucial in business.”

Gerrish took up the MD role in October 2023 and still relishes its variety. “Last Monday, I was speaking on a bank panel about the aviation sector outlook for 2024, on Thursday I did a live TV interview for CNBC, and on other days I was chairing credit committees. We have a robust process around our ratings and if we think our opinion on an entity’s creditworthiness could change we’ll take it to a credit committee to come to a conclusion. We then alert the market to our rating decision before answering questions from investors.”

Part of her role also involves meeting with finance directors, something Gerrish says gives her unprecedented access to business engines: “There are few other jobs where you get quite that much direct exposure to the senior management teams of large FTSE 100 companies.”

Education
Studied accountancy at University of Nottingham

2004
Trains with PWC, qualifying in 2007

2007
Joins Royal Bank of Scotland as Senior Analyst

2011
Moves to S&P Global Ratings as Associate, rising to Managing Director

As a senior woman in finance, Gerrish is in a relative minority in the industry, though. “It is still generally true that you see more men in roles at the very senior levels,” she notes. “We have made great strides as an industry but when I attend external meetings with senior investors, they still tend to be male dominated, so there’s clearly work to do.”

She cites S&P’s own diversity as a beacon for positive change, though – “within my team, for example, there are actually more women than men” – along with the impact of its network Wins (Women’s Initiative for Networking and Success), which celebrates its 20th anniversary this year.

“Early in my career here I was at a Wins event discussing Sheryl Sandberg’s book Lean In, which tells women to ‘sit at the table’, and I took this advice literally at our weekly meetings with the credit analysts afterwards,” she notes. “The room had a big table, but not enough room for everyone. I would sit at the back, but when I started to sit at the table instead one of the senior women at S&P noticed and offered to be my mentor. It was one of the best pieces of advice I’ve been given.

“Another came from a female manager who told me you should always stay positive about the firm you work for or the task you’re given. You often get pushback if something’s going to change, so again think positively about how you can change with it.”

Full perspective

S&P Global’s enormous reach means Gerrish has the widest possible perspective on change at her fingertips.

“If an investor has a question on something to do with, say, US airline trends, I can get an opinion from my sector lead there within minutes,” she says. “Similarly, I also coordinate global research on the sector, and because everyone can put their piece in from the different regions we can quickly come up with a global article.”

Access to macroeconomists is another valuable resource she can tap into. “For airlines, as an example, pressure on consumer spending is an important point because obviously if people have less money, they might stop spending on air travel.”

With that in mind, what is the outlook for the UK economy? “It’s our view that the UK economy will remain weak this year,” says Gerrish. “Our GDP growth forecast is about 0.4% as high price inflation continues. The labour market is very tight, so in other words, unemployment is low given the macro pressure. And obviously, the geopolitical situations could impact a wide number of sectors at the moment.

“We’ve seen interest rates come down a little bit, but ‘higher for longer’ is how we’ve been talking about this phase. Interest rates have been unusually low for several years. Now, they’ve stepped up and we’re expecting that to continue for a little longer. So, that’s been impacting companies because their cost of debt has increased.”

Markets may be going through a period of turbulence, but forecasting her own working life, Gerrish anticipates consistency. “When you’re starting your career, you spend a few years in a role and think, maybe it’s time to get some new experience. I’ve had so many different experiences here, though, that I have never wanted to move on,” she notes.

“The people at S&P are generous with their time and really want to get the ratings right. And if you work with people that you respect and really want to work together as a team, that’s one of the most important things for me.”

spglobal.com

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