Why Emotional Intelligence is Crucial for Finance Directors

Technical expertise and financial expertise remain vital to successful Finance Directors (FDs). However, modern directors consider emotional intelligence (EI) equally essential. They recognise the value of highly developed EI.

This skill enables them to figure out the complexities of interpersonal dynamics, which are integral to advancing collaboration within the organisation. EI is also essential to developing strong stakeholder relationships and managing change ethically.

Building relationships and managing people

Well-developed EI allows top FDs to create and maintain strong relationships across the organisation. These relationships enable a collaborative environment and enhance trust at all levels. They are essential to obtaining insights and driving initiatives and changes throughout the organisation.

In addition, strong relationships allow FDs to become influential and respected leaders. People trust them, which enhances motivation and creates a positive working environment, and this positivity covers all internal stakeholders, including board members, executives, and employees.

EI is paramount not only in internal relationships but also in external stakeholder relationships. For example, FDs create vital connections with potential investors and partners. Having a high standard of EI enables FDs to develop trust with these connections.

Making ethical decisions under pressure

FDs often have to make critical decisions in highly pressurised situations. This is especially likely to happen during times of financial uncertainty within the organisation or the wider environment. Having good EI allows FDs to remain calm under this pressure and make decisions that are ethical and beneficial to the business.

They can make these ethical decisions because their enhanced EI allows them to consider the emotional impact of decisions and balance this impact with the organisation’s financial well-being.

Overall, EI enables FDs to make balanced decisions that are in the best interests of the organisation and its internal and external stakeholders.

Managing change and anticipating employee responses

In a rapidly evolving business environment, FDs are often at the forefront of leading organisational changes. They implement new financial systems and provide real-time analysis that is integral to formulating financial strategies to drive the business forward.

When managing change, the most successful FDs use their EI to anticipate employees’ emotional responses to proposed changes. These insights allow them to work with others, such as the HR function, to manage employee responses and concerns during the change period.

In summary

Technical skills are as fundamental as ever to an FD’s success. However, today’s top FDs also recognise the value of EI. This is an essential attribute of a modern FD navigating a digital financial landscape that changes often and can be financially challenging.

Having a well-developed EI allows top finance professionals to navigate interpersonal dynamics within the organisation. The management of these dynamics includes understanding personal reactions to change and using this insight to lead organisational change in an ethical manner that benefits the organisation, the board, and the employees.

In addition, FDs that possess enhanced EI are better able to develop trusting and rewarding relationships with external stakeholders who are integral to the organisation’s growth and success.