The world outside the numbers for a finance director
The traditional role of an FD has now metamorphosed into something very different. It’s important to keep abreast of these changes in order to optimise levels of success and reputation as an FD.
The changes have occurred because the world of business itself has changed. More businesses are being created. As of the start of 2019, there were 5.8 million small businesses in the UK. Within these businesses, individuals have a more diverse portfolio of responsibility than ever. This includes FDs. So, what are these new responsibilities that have changed the FD role so much?
The role of a traditional finance director
In order to put the changes to the role in context, it’s a good idea to take a look at what was traditionally expected of an FD.
FDs have always been involved with numbers. They are members of the senior executive team and they have responsibility for ensuring that the business remains financially healthy. Although this is still central to the role of an FD, there is now a world outside of the numbers which they need to embrace.
Finance Directors and the commercial role
While the numbers side of the FD role still exists, today’s FDs often need to embrace a more commercial side to the work that they do. They are involved in developing strategies for the business. This means that they are fully integrated within the senior management team and not seen as a separate entity, which was often the case previously.
This means that modern FDs have to possess business acumen as well as financial expertise. This enables them to be able to see the bigger picture in a business.
Why has the finance director role changed?
The growth of small businesses in the UK has certainly been a factor in changing the role of an FD. This has resulted from the need for many people involved with a small business to be multi faceted.
Another factor that has influenced these changes is the altered attitudes that have existed since the global financial crisis. Finance directors began to realise that they needed to have more of a handle on the operating model of a business, in order to have better financial control.
What skills do modern finance directors need?
The most highly valued FDs need to be able to blend traditional skills with modern requirements. In order to do this, they need to develop their skill set. Skills that they need to have in place include:
- Knowledge of how to apply technology.
- An understanding of the use of big data.
- An appreciation of the role of cyber security.
While FDs are not expected to be technicians, they are expected to be able to embrace these skills in helping to manage strategies for the business.
Traditionally, FDs have had a reputation for merely being senior accountants. This was due to the fact that their role centred on numbers. While numbers are still important to FDs, there is now a whole world outside of the figures. FDs now need to have business skills and an appreciation of technology and its use. This knowledge helps them to embrace the new commercial aspect of their role.
If you are a finance director looking for your next role, join our FD register.
Date Posted: December 18th 2019
Posted By: Phil Scott