What a good Finance Director looks like
If so many of the FD’s traditional responsibilities are now delegated to the FC, it seems reasonable to ask what is left for the FD to do – as it turns out, the answer is, plenty!
Guardian of the balance sheet
The delegation of certain responsibilities to the FC has resulted in the FD taking on a more engaging role in both public and private spheres. This in turn making it even more imperative that the FD’s knowledge of the balance sheet can be both retained and relayed without hesitation. Being caught off guard, in private or public, is not an option.
A numerical linguist
FDs must have the ability to quickly formulate concise answers to questions regarding the balance sheet. Confidence breeds confidence and the ability to communicate complex ideas to non-financially minded people is a key skill all FDs must possess. Modern businesses cannot afford for anything to be lost in translation, so turning numbers into words is a must.
One step ahead
“Risk comes from not knowing what you are doing”, stated the American business magnate Warren Buffet. A good FD is not expected to be omniscient, no one is, but planning one step ahead is an integral part of risk assessment. We live in a globalised world where causality knows no borders. Political change, terrorism, supply chain disruption and natural disasters will all ripple through the waters of international markets. Keeping abreast of developments in key industries and an eye on current affairs is a full-time job in itself. Nevertheless, CEOs and MDs up and down the country will be asking their FDs about the possible impact of Brexit or TTIP upon their companies. A good FD constantly has an ear to the ground and a contingency plan for what could happen, in other words, managing liquidity risk.
Show me the money
An agent of change, innovative and naturally inquisitive, an FD has to look both inwards and outwards to cut costs. Having the confidence and knowledge to provide input into strategic decisions, such as whether to outsource or to manufacture, is vital. Tech savvy, a good FD will also be comfortable assessing the value of investing in complex IT solutions.
United we stand
Not afraid to follow conviction, the FD has both the right and an obligation to challenge, using evidence to challenge the status quo and spurious arguments. Choosing the correct time when to do so is a skill in itself. As we at the F-Zone like to say: “Support in public, challenge in private”.
A good FD should be naturally analytical, decisive and forward-looking, challenging but diplomatic. Above all though, the FD, more than anyone in the boardroom, must constantly champion the interests of the shareholders for they are the true guardians.