The seven hats of the FD
More open business cultures, a faster pace of change and new technologies have highlighted the importance of the many different hats a finance leader has to wear. In the first of a three-part series, Richard Young talks to finance directors (FDs) about two of the seven key facets of the FD role.
First, a statement of the obvious: every FD faces a huge variety of issues. In smaller businesses they can be a jack of all trades, managing a range of support services. In quoted companies, they’re spokespeople with the power to move markets. And every FD has fiduciary duties that require much more than accounting skills.
In order to explore the roles these various situations demand, we spoke to seven FDs about different aspects of their work. Each of them fulfils all of the roles in some shape or form. But by interviewing different types of FD – from FTSE CFOs to start-up FDs – we’ve been able to explore some of the nuances of the finance director role in modern business.
It starts with finance
All the FDs agreed that even in the age of the technocratic finance chief, where communication skills and leadership ability are more important than ever, you can’t take a seat at the table without outstanding core finance skills, no matter how well you wear the seven hats we discussed.
That’s as much about credibility as it is duty. ‘You can never stand for your internal customers saying the numbers are wrong,’ says Colin Bramall, CFO at James Hull Associates. ‘They have to be right and the processes behind them must be as good as possible – certainly enough to make an overwhelming case when you’re evaluating people’ s performance.’ That trust others place in the FD is crucial to their ability to play the role of ‘magistrate’ – the arbiter, the evaluator of decisions.
The value of relationships
Even the best FD relies on teamwork. The relationships they build with board colleagues and senior managers are a platform for real effectiveness. ‘It comes down to being a confidant(e) and an advisor – but also a challenger and someone who can help correct problems wherever they crop up,’ says Stuart Bridges, CFO of FTSE 250 insurance giant Hiscox. ‘You have to be able to tell people when their actions are wrong.’ So the best FDs become the equivalent of a mafia family’s ‘consigliere’, a trusted advisor whose counsel is essential in the face of big decisions.
This is an extract from the Finance & Management Magazine, Issue 194, December 2011.
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