Developing and Retaining the Next Generation of Finance Directors

The role of Finance Director (FD) continues to evolve. Modern FDs are no longer simply number crunchers, they are strategic leaders who help shape key business decisions. Their responsibilities are varied, from driving long-term value to financial risk management and digital transformation.

To develop the next generation of FDs, forward-thinking organisations focus on developing the abilities and strengths of individuals within the finance function, including strategic thinking, communication skills, and leadership abilities. We will examine how an organisation does this.

Developing a talent pipeline

Creating a talent pipeline ensures a business develops promising individuals in the right way. It does this by giving those with high potential the tools and opportunities they need to progress.

Identifying potential talent is an integral aspect of this. This identification can be made in various ways, including the use of performance evaluations, leadership assessment tools, and mentorship programmes.

Once an organisation identifies someone with potential, it provides growth opportunities, such as sponsoring professional certification and enabling participation in executive education programmes.

In addition, the most successful organisations promote strategic thinking to develop individuals who could provide future financial leadership.

Upskilling for the digital age

Today’s FDs operate in a digital environment, so upskilling individuals looking to progress up the finance leadership ladder makes sense. Various areas are integral to this upskilling, including:

• Embracing artificial intelligence and recognising its potential in the business.
• Utilising data analytics and predictive tools.
• Understanding automation and how it can be used in the organisation.

Encouraging leadership and soft skills

FDs were mostly numbers people in the past, but this is no longer true. Today, they must have highly developed soft skills. For this reason, organisations developing people to join the next generation of FDs recognise the importance of promoting these soft skills, which include the following:

• Emotional Intelligence (EQ)
• Conflict resolution and negotiation
• Communication skills

Developing retention strategies

Retaining the most talented individuals in the finance function is equally as important as developing them. Companies want to ensure that any investment in development and training benefits the organisation in the long term. Retaining talent is also more cost-effective than spending money on recruitment.

Creating a retention strategy makes it more likely that talented individuals will remain with the organisation. The most successful retention strategies cover the following areas:

• Clear career progression showing a transparent and defined path.
• Work-life balance, including hybrid and flexible working and potential options for personalised work schedules.
• Competitive compensation and benefits, including salary, bonuses, and other benefits, such as membership of health and well-being programmes.

Top-performing FDs positively impact the organisation’s financial well-being, so it makes sense to develop promising individuals within the finance function who already know the business and possess the potential to progress to a senior level. Creating a talent pipeline, upskilling individuals for the digital age, and developing soft skills allows this to happen. Developing a retention strategy makes it more likely that individuals who benefit from development will remain with the organisation.