So, what does a good finance director (FD) actually look like?
Yes of course they control the budget, they look after risk management and compliance and are always planning & forecasting. But actually, there’s a lot more to it than that.
Here we’ve broken down the different components of an FD’s role into five key areas.
1. They are the guardian of the balance sheet
First and foremost, a good FD must know their numbers. They understand the risk associated with each figure on the balance sheet and respond quickly, confidently and clearly to any enquiries.
Knowing their numbers builds confidence in the FD, and, from both an internal and external perspective, confidence in the FD breeds confidence in the business.
2. They use data for smarter decision-making
Data analysis is increasingly vital in business and a good FD knows that. They collect, share and turn data from across the business into value & insight. They build an understanding of digital and smart technologies to help facilitate this. They support the board by ensuring that data is the bridge between risk and strategy.
3. They’re a translator and an artist
A good FD will build trust with non-financial managers, ensuring buy-in from across the company. They will turn numbers into pictures, words & stories, making the complex seem really simple. They’ll build cohesive arguments without just saying “because the numbers say so”. They are, dare we say it, creative!
4. They drive profitability
This might surprise you, but a good FD is an agent of change. They take an interest in every department and have major input into strategic decisions – from the angles of cost, risk and return. They’re also much closer to the customer than you might expect. And the obvious one of course – they’re always looking to minimise cost.
5. Public support, private challenge
This area is somewhat nuanced but incredibly important. An effective FD will provide public support for the MD in the boardroom and externally. They then have an obligation to challenge them in private. Cultural fit here is obviously essential, as is their ability to build relationships with other department heads, not just the MD.
By mastering these five areas, a good finance director can make a huge impact to the long-term growth and stability of a business. The days of the FD being the bean counter in the corner are thankfully long gone.
