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The Finance Director job has begun to evolve and there are new key qualities required. The position previously focused on accounting, tax and other areas. Yet in present times the analytical understanding of financial accounting is not the sole pre-requisite. What an executive search company seeks in an FD depends on a number of factors, including whether the company is listed on the stock exchange or is an owner managed business.
We must distinguish the difference between what a UK Plc board will lay out in the job specification for a group FD, what an American or other internationally parented organisation require in a European FD, and what private companies look for. However, this sub-division starting point will not provide an accurate picture because there are conflicting ideas on what is required of a finance director, largely dependent upon the imperative ambitions of the organisation.
CA, OR NOT CA?
About a decade ago a group FD achieving membership of the institute of Chartered Accountants was widely considered a vital achievement but it is not necessarily so today. Companies no longer focus solely upon accountancy recruitments hands on. There are examples of individuals who have progressed through management consultancy or through an MBA, rather than the traditional accounting route.
These individuals tend to have good honours degrees, and often previous line experience. Their appeal to an executive recruiting agency is their ability to compile highly successful teams of accountants, controllers and other financial officers masterful at these functions and possessing the ability to make strategic decisions.
This finance director is a link between the board and the finance function, and their objective is to analyse management information in order to be able to advise the board on areas such as new business ventures. Their role is now more to do with risk management, capitalisation, debt equity ratios and particularly presentation of the group’s financial strategy than it was in the past.
Fortune 500 companies and OMBs may not be searching for a finance director with investor relation experience, but what they will want is someone with the ability to define and implement financial strategy. A Fortune 500 company might seek someone to implement group strategy on a financial level in their operating region and an OMB might seek someone who can take the company to market. Finance directors now evidently have a broader role to play.
THE FUTURE
The type of finance director an organisation will search for heavily depends on the board’s corporate and commercial strategy. In a time of recession, or with increasing global competition, margins will tighten; and in a time of rapid growth the board should focus on finding an individual with relevant strategic experience.
DECIDING WHAT IS REQUIRED
Used wisely and well, a financial head hunter can add immense value to an executive recruiter search by making sure that the right team is put together at the right time to fulfil strategic objectives. A board, if unsure is naturally inclined to want to bring in a very similar group finance director. This approach is not always successful.
Although it is easy for a financial head hunter to coincide with the client's judgement, and more dangerous for the financial head hunter to challenge such thinking, a true partnership needs to be developed. The client’s real, current and future needs must be analysed and traditional ideas held up for scrutiny. The client company must feel confident that the financial executive search company will explore what it really needs rather than what it thinks it needs.
An example of this is a company stating that sector experience is a pre-requisite when a candidate’s skill is often readily transferable. New talent and alternative outlooks may greatly benefit the company. If most of the board and executive team have sector experience there is no reason to acquire more.
THE SORT OF EXPERIENCE THAT COUNTS
For those aiming to be a group finance director of a FTSE 100 and perhaps on to CEO or chairmanship require a strong build up of the right experience on their CV. By their mid 30s candidates should demonstrate experience of having worked within audit or risk management and corporate finance as a minimum. International experience is important, however financial control and management accounting experience is no longer sought after as much.
Group FDs must display physical stamina and intellectual dexterity given the pushing demands made upon them today. Secondly, being assertive as an individual may be necessary in order to make a stand against strong boards. Thirdly, they must be pragmatic with the ability to build successful relationships with individuals worldwide and at all levels. Yet, predominantly, Group finance directors must be able to demonstrate real commercial strategic vision.
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