It’s no longer just about finance ledgers and cash flow. These days, any FD worth their salt is an expert in all aspects of the business in which they work.
The key reason for this has been the recession, which has been both a vast challenge and a huge opportunity for FDs to prove their worth. It has changed the way the FD is perceived in the board room.
“With austerity measures still in force across many organisations, FDs are continuing to make decisions every day,” says Paul Sparkes, product director at IRIS Accounting & Business Solutions. “The recession has given FDs a real opportunity to prove their worth, with many rivalling the authority of the CEO.”
Our own research supports this. The Real Business Satisfaction Survey, in association with ICAEW, has gathered the views of more than 900 senior financial decision makers across Britain.
The results show that in 58 per cent of companies, the amount of time discussing finance in the boardroom has increased. And for 43 per cent of respondents, the amount of influence yielded by the FD in the boardroom has increased.
But according to some, it isn’t just the FD’s role that has increased: other roles have grown in prominence as well, strengthening the board.
“Like all good working democratic boards, important decisions are not taken by individuals in isolation but as a collective, with experts in different areas of the business combining to make the right decisions for the business as a whole,” says Rob Amar, MD of fine foods importer R.H. Amar.
“In today’s economic climate, the FD – like the marketing director, MD or chairman – has to have his or her finger on the pulse of what really makes the business tick, and needs to display creativity and agility when faced with sudden difficult challenges such as key currency fluctuations or potential business exposures.”
This expanding role is seeing FDs become responsible for other areas of the business.
“Site viability decisions, disposal of non-core business, contractual negotiations, business development, business relocation, etc – FDs are becoming more influential in other areas of their business,” says John Seaton, financial and commercial director of Nova Laboratories, a manufacturer of trial medicines.
“Their exposure to and understanding of the dynamics involved in their particular sector increases their insight; finding the key drivers for success, differentiating them from competitors and spotting trends in that particular market.”
As FDs successfully make the move into general management, could the FD become a co-CEO?
“It’s no surprise that more FDs are becoming CEOs than ever before. The turmoil of the last few years has thrown FDs into the spotlight but they have clearly risen to the challenge,” says IRIS’s Sparkes. “We’re seeing a breed of FDs coming through, who have greater and more varied skill sets and can therefore wield more influence at board level.”
Who’s more important: the FD or the CEO? Have your say by posting a comment below or tweeting #FDVoice
The Real Business Satisfaction Survey is part of our FDs’ Excellence Awards, held in association with ICAEW, on May 24, 2012.
There is still time to put forward nominations for the FDs’ Excellence Awards – enter here. Categories still open include: Private Company FD of the Year, Young FD of the Year and FD of the Future.
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