What is the role of a Finance Director (FD)?
The Finance Director is often the most senior accountant in a business, particularly smaller businesses (sub £100m t/o) however, in some larger businesses, a Finance Director will report into a CFO. They combine the management and protection of shareholder interests with the compliance and reporting demanded by regularity authorities. The FD is often viewed as the member of the board who creates a solid foundation upon which a business can grow.
The FD will Provide strategic and financial guidance to ensure that the company's financial commitments are met and develop all necessary policies and procedures to ensure the sound financial management and control of the company.
Combined with technical competence it is also essential that they have the communication skills to match their ability to ‘do the numbers’.
Fundamental skills that are required in order to be a successful Finance Director (FD), include:
Excellent communication skills – with the board, across the business as a whole and with shareholders and the outside world;
Wider people skills, particularly the ability to lead and develop a high calibre team with succession embedded;
Commerciality and in-depth understanding of the business, its markets and customers; the FD is not a timid, spreadsheet and IFRS technician they need to know what the key drivers of the business are and how to affect them;
The ability to support and challenge the Managing Director; and
An affinity with numbers and the ability to interpret them for others.
Finance affects all areas of the business and the FD needs to be a champion of change; holding all budget holders to account for their operational effectiveness and improvement.
How do I become a Finance Director?
You will need to be a qualified accountant with significant post qualification experience gained predominantly in Industry/ commerce.
NB It is possible to make the move directly from an audit/ advisory in the profession but it is not the norm and many individuals who take this route move directly to a client.
Of course, you need to be a strong technician with excellent financial analysis skills. You should have acquired all round financial knowledge; equally comfortable managing the balance sheet, cash and external relationships with advisors/ lenders/ investors and producing value added management information around the P&L. Most FD’s are stronger on one half of this but they acknowledge that, seek experience and build their team accordingly.
The development of an informative, action oriented Board Pack is a key deliverable for the FD but it doesn’t stop there, as a pivotal member of the board and close adviser to the MD it is your ability to successfully communicate the information, recommendations and resource management that will make you stand out as a highly effective FD.
Extensive senior level accountancy experience at Financial Controller/ Head of Finance level;
Significant managerial experience – building high performing finance teams;
Knowledge of the industry – however FD skills are to an extent generic and reasonable sector cross-over is possible;
Strategic thinking skills – the FD must combine being in the detail with strategic commercial thinking; and
Excellent interpersonal skills – the FD intersects with all departments and stakeholders.
Typical Job Specification for a Finance Director (FD):
The FD of Company X must be able to add value to the strategic direction, commercial and operational performance, funding and growth of the business whilst remaining hands on and familiar with the financial detail of the company. Key to the role will be effective input to, and further development of, operational systems, procedures and controls across the business, together with commercial oversight of contracts, services and relationships. Technical financial expertise will be a given, but they will be fully responsible for the financial stewardship of the Group; improving financial control, providing timely accurate financial information together with meaningful analysis and forecasts in order to provide pro-active advice and stewardship to the executive management.
Key Responsibilities will include:
Provision of sound financial advice and guidance to board and senior leadership throughout Company X;
Finance business partner and “right hand person” to the MD; capable of operating as tacit no2 in his absence;
Provide leadership to the Board’s Group Finance and Accounting strategy, to optimise the company’s financial performance and strategic position;
Play a key role in the development of commercial and operational strategy and support in key areas of M&A activity;
Ensure that the Group’s accounting systems are robust, compliant and support current activities and future growth;
Close interaction and engagement with shareholders including weekly and monthly reporting processes, and annual audit process;
Timely delivery of accounting and controlling reports (2nd working day flash, 6th working day consolidated accounts) with 12 months rolling forecast, weekly cash forecasting 12 weeks rolling, ensuring consistency of cash and P&L forecast;
Ensure Company X is compliant with all taxation, company secretarial and other regulatory compliance;
Lead and develop the finance team and its coordination with the Directors and the Senior Leadership;
Take ultimate responsibility for cash and working capital management and implementation of policies and procedures as appropriate;
Establish a high level of credibility and manage strong working relationships with external advisory parties and stakeholders;
Establishing and monitoring performance reporting systems (i.e. track performance against goals, ensure Group Directors are provided with quality regular reports, provide regular updates to the MD) including value added KPI’s especially around manufacturing processes and costs etc;
Regularly evaluating operating procedures and create/ adapt best practices to ensure uniform performance throughout the organisation;
Hiring, training, motivating, coaching, reviewing and retaining high performing personnel; and
The role will require engagement with employees across the business; the FD needs to be an effective, culturally sensitive and fluent communicator capable of explaining complex financial information in a user-friendly manner.