Beyond bean counting

If you’re looking for a finance director (FD), or aspiring to become one yourself, you should be aware that this position now carries with it a range of responsibilities and opportunities extending far beyond its traditional finance functions.

If you’re looking for a finance director (FD), or aspiring to become one yourself, you should be aware that this position now carries with it a range of responsibilities and opportunities extending far beyond its traditional finance functions.

The grey number cruncher of yesteryear is on the way out and is being replaced by ‘a leader, strategist, relationship manager, coach and communicator, intuitively understanding risk and comfortable with e-commerce’.

That’s the view of Terry Carroll, finance director of Wales and north of England-focused property developer Eatonfield, former finance director of National and Provincial Building Society and ex-treasurer of the Halifax. A 1980s pioneer of balance sheet management including derivatives at both these previous posts, and author of The Role of the Finance Director among other books, Carroll says his job at Eatonfield is essentially a matter of asking the right strategic questions.

Being on top of basic accounting is still an important part of the job, and most finance directors have accountancy training, if not a career background, in the profession. After all, among the many pressures coming to bear and expanding the role is the introduction of International Financial Reporting Standards (IFRS), certainly for companies quoted on the London Stock Exchange, and the increased risks posed by the controversial US Sarbanes-Oxley rules on corporate governance that are washing across the Atlantic.

Broader base of skills

But Carroll is not alone in arguing that wider, even ‘softer’, skills are needed these days, especially by those who see the post as a stepping stone to the top of a company. According to some surveys, that could number around a third of all finance directors. Carroll cites a recent poll of 45 leading chief financial officers by finance magazine CFO Europe, which showed that communication and relationship management skills are almost as highly valued as financial aptitude.

Stephen Oliver, former finance director of online learning group Epic and media concern Avesco, and now at human resources software specialist OneClick HR, agrees. ‘Ten years ago, the finance director had a process-driven role, concerned with money, getting in the cash, writing budgets and saying who was above and below budget,’ he reflects.

‘Now, especially in smaller companies, the role is much wider. The finance director has to stand shoulder to shoulder with the chief executive officer in understanding the company’s strategy and seeing it through.

‘Often the finance director is the “doer” in a company, executing the bright ideas of other people,’ adds Oliver. ‘Contracts will be passed to the finance director to review with an eye to the risks involved and the implications for revenue recognition and other related issues.’