With about 80% of the FDs questioned saying they spend less than one-quarter of their time with their CEO, perhaps the relationship isn’t as close as previously thought. But what emerges most clearly is that the financial director’s role is to be much more than a deputy CEO.
Just 36% of respondents said their CEO had a strong grasp of financial reporting and accounting issues. And 47% disagreed with the suggestion that the CEO takes ultimate responsibility for top-level financial policy.
Meanwhile only 42% of the FDs polled said they wanted to become a CEO at all. And anyway, more than half disagreed with the suggestion that the CEO considers the FD to be his or her natural successor. Today, despite Cadbury, despite Turnbull, the need for sound corporate governance is receiving more attention than ever. Meanwhile accounting policies – from FRS 17 to goodwill amortisation to the appropriate treatment of special purpose vehicles – are eating up more and more column inches in the financial press.
The FD’s role in all this is firstly to ensure that these policies are sound and then ensure both the board and the financial community at large are convinced they are sound.
The fact that both are now equally important is new and the CEO alone cannot be relied upon to ensure they happen.
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