From a career perspective, giving an award to a financial director seems a little redundant. They have already climbed to the top of their own particular corporate or organisational tree and face up to the financial and compliance challenges of the modern business world daily.
In fact FDs are increasingly being stretched in ways unimaginable 20 years ago. No longer merely the financial policemen of the business world, they are expected not just to monitor value, but to add it.
The Accountancy Age Awards for Excellence gives us an opportunity to recognise this evolving role. Our Financial Director of the Year Award in association with Financial Director magazine will be conferred for professional excellence in financial management and strategy, and is open to entrants from any sector of industry, commerce or public life.
The judges will be looking for evidence of substantial financial achievement, for example, directing significant improvements in operational efficiency or quality of service.
There are an ever-growing number of ways to measure value and value drivers – the balanced scorecard, activity-based costing and shareholder value creation, to name but three – and FDs are key to ensuring the finance function remains at the heart of corporate information provision and analysis.
The leading-edge FD is one who is actively involved in creating value, not just measuring it. The best FD brings skills and a viewpoint unique among their colleagues: they have unfettered access to the entire business and they have the business and numeracy skills to be able to interpret what is going on and how to leverage value.
Financial Director magazine editor Andrew Sawers says, ‘No longer is the FD purely concerned with setting and meeting budgets. No longer is the finance function to be branded – as one FD recently put it – the “purchase prevention unit”. Indeed, the best FDs are not so much concerned with questions such as “Can we afford to do this?” as with “How can we afford to do this?” Theirs is now truly an enabling role, one which drives the business forward rather than just recording its progress.
‘To do all this the FD needs skills, abilities and personal qualities that take him or her far beyond a rigorous comprehension of accounting standards and tax matters. Skills such as leadership, the ability to communicate effectively – especially with non-financial managers – and the ability to thoroughly understand (and do something with!) the issues that will shape the business: these are just some of the qualities of the best FDs in the country.’
The balanced scorecard is a good case in point. It involves FDs in the field of measuring and accounting for the non-financial aspects of their organisation and, crucially, does so in a way that means those values can be communicated much as financial indicators are. Customer satisfaction, the promptness of deliveries, complaint handling – all can be integrated into a set of indicators to be communicated to the board or to stakeholders.
Add this evolution to the increasing emphasis placed on the idea of the stakeholder society – with the DTI’s company law review and the continuing evolution of the corporate governance debate – and it is clear why FDs are finding themselves at the forefront management in its broadest sense.
It is also clear that the accountancy qualification and the profession itself continues to make a strong contribution to UK plc and is a highly regarded training ground and foundation for the boardroom. Last year, Financial Director surveyed the FDs of the FTSE-100 and found that 56% were chartered accountants, 15% were CIMA qualified, 6% were ACCA and 2% CIPFA. This represents something of a slip back from, say 1973, when 73% of FTSE FDs were CAs.
But it still demonstrates the extent to which the financial language of accountants underpins business language.
The area where top FDs will clearly stand out is in their role as business leaders, communicating their organisation’s vision and USP and banishing the perception that they are necessary but unimaginative and over-promoted bean-counters. Paramount is an understanding of how an organisation works, what its parameters are and an ability to support decision and strategy making. And if they have those qualities, are they then CEO material?
Perhaps that question has been best answered by a headhunter, who suggests that accountancy-trained FDs do demonstrate wider business knowledge and capabilities. ‘Increasingly we are seeing a requirement for what people are calling a commercial finance director. The financially trained people are increasingly making that move across, but they have to know sales and marketing as well.’
IN ASSOCIATION WITH FINANCIAL DIRECTOR
Financial Director magazine has been essential reading for Britain’s most senior financial decision-makers ever since its launch in 1984. It remains the only UK title written specifically for financial directors on the issues that affect their businesses and contains regular insight into corporate strategy, banking and treasury, management of the finance function and more.
EVENT DETAILS Free entry
Closing date for entries: 30 July 1999
Ceremony: 3 November 1999
Venue: Natural History Museum, London
For an entry form: call 0171 316 9554 or email email@example.com. There are 12 categories in this year’s awards including a new category for trainee accountants.
The ceremony will take place in the Natural History Museum in November, and you can email us to request an entry form (see above for details).
This year, there is one category that will be judged by readers – Personality of the Year. Nominees will be drawn by Accountancy Age’s editorial team, and shortlisted by the judging panel. Readers can then vote for the winning personality.
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Company bosses are considering relocating operations or headquarters away from the UK following the country's decision to leave the European Union