I regularly get asked as part of my role as a TAB facilitator what makes a good Finance Director (“FD”), so I thought I would set out the 7 characteristics which I believe are required. I think a useful point to make from the outset is that the role of the Finance Controller (“FC”) and that of the FD are different but in SMEs the lines between these roles may become blurred. It is important to note however, that the FD “DIRECTS” and the FC “CONTROLS” the day to day operations of the finance function. The required characteristics are:
They are expected to make decisions. How many they get right will establish if they are any good, however they must take responsibility and be seen within the organisation to take the lead.
They must be able to think “outside of the box” and have the knowledge and experiences to be creative in their thinking.
They must have the ability to adapt to many different functions or activities, the FD may have to step into other roles e.g. Interim Managing Director. They must be commercially aware and must understand the other areas of the business such as HR, Strategic direction and facilities management to name a few.
They must be seen to have energy and passion for the organisation and must be looking for the organisation to succeed. They need to be strong and active within the organisation by constantly looking at ways to improve.
The FD needs to balance ambition with reality and needs to be the “wise counsel to the board without allowing entrepreneurial flair to become suppressed.”
The financial information produced must stand up to scrutiny and all stakeholders expect honesty and a “nothing to hide” attitude.
It is expected that standards (ethics) must be maintained, the FD should be seen as the “Champion” of the organisations culture and ensure that good corporate governance is maintained.
In summary the 7 characteristics of a good FD are:
D Decision maker
By Graeme Allison, TAB Facilitator