Too close for comfort?

But when the question is as potentially inflammatory as one that asks whether UK FDs are too close to their companies to be objective about their accounts, that’s no great surprise.

And the results certainly are inflammatory. Almost one in three UK finance directors believe they are too close to their companies to be objective about the numbers. In these post-Enron, post-Worldcom times, that’s a startling admission.

What is equally surprising is just how unapologetic the respondents are when it comes to justifying that position. ‘Yes, of course FDs are too close to their companies to be objective,’ says one.

‘Objectivity is for the auditors and liquidators – not people who run real businesses.’ Some blame bonus structures for compromising their positions while another says simply. ‘Of course FDs cannot be objective. Or they cannot be committed to that company.’

Should we expect anything different? Well, yes.

There are two ways of interpreting the recent spate of stories about profit warnings, restated accounts and departing finance directors that has hogged the business pages in recent months.

One is to interpret it as a sign that boardrooms are getting better at addressing governance issues.

The other is to conclude that financial responsibility is now so lacking in UK plc that companies have no choice but to come clean.

The truth undoubtedly depends on the individual business. Some fall into the first camp, some into the second. True, the majority of FDs responding to our survey believe they are not too close to their companies for their objectivity to be compromised.

Nevertheless, the number who believe they have to put the numbers ahead of their consciences is worryingly high.

The difference between the two is summed up best by the FD who told us: ‘Responsible finance directors are the ones best placed to ensure the accounts of companies are correct. At the end of the day, it is all about trust and governance.

‘Problems arise when either of these two things breaks down which is true of any job.’

There has been no shortage of evidence of that lately.