The challenges facing finance directors have changed dramatically over the past couple of decades. More than ever before, the onus is on FDs to provide leadership as well as use their technical skills in ways relevant to the organisation.
One headhunter recently told me that demand for good CFOs was stronger than ever. But what’s new is they’re being asked to transcend their normal finance functions and provide more counsel to the CEOs and boards, rather than being the bygone green-visored accumulators of data.
Admittedly, finance directors hold an ambiguous position. They definitely head up the finance function and sit at the board table, and it’s up to them to provide leadership on the financial aspects of matters under discussion during other decision-making processes. This leadership must, however, always be exercised within the context of overall leadership of the CEO or fellow board members.
And yet often the finance director is the only professionally qualified member of the board. The nature of financial training teaches the finance director to be objective and analytical. Because of this, they can be an essential balance or foil for other board members’ ideas and skills. Using these analytical skills in such a way as to both enable and restrain at the same time can prove a considerable challenge.
It’s true to say that many leaders seem to be born that way, driven by an urge to realise their vision, unable to work comfortably within constraints. At the same time, I have encountered many finance professionals who would be filled with alarm at the thought of having to provide leadership.
The majority of professionals who rise to seniority, and in particular to finance directorship, must be ambitious for leadership. The question they face is, what is the nature of the leadership they should be providing within the context of the organisation’s needs and financial requirements?
In future, we’ll explore ways in which finance directors can develop their vision for the finance function, and thus sharpen the focus of their individual leadership.