What is the role of a Director of Finance and how to be a good one

If you work within finance or aspire to move into the sector, the countless career routes and opportunities can make it hard to know what role might suit you best. We want to hone in on what some of the key roles entail, to help you to forge your own path. This week we focus on Director of Finance.

At Robertson Bell, we work with a wide range of organisations, from sprawling government departments to 10-person charities. This is of course a consideration during the recruitment process; we strive to match up experience based on client need or give a candidate a step-up opportunity.

Unsurprisingly this also impacts the remit of certain positions. For instance, the role of a Director of Finance in a large organisation with multiple stakeholders may require a more strategic approach, whereas in small charity, they may be required to be more hands-on with general account matters.

That being said, there are of course key responsibilities and tasks that remain consistent to a Director of Finance regardless of the organisation, as well as common traits that will help someone to be an effective one. Let’s delve in.

So, what exactly is a Director of Finance?

Directors of Finance or Finance Directors (FDs) are members of a senior executive team who manage all aspects of a company's financial health and long-term growth.

They create, develop and implement the financial policies and plans of an organisation, oversee the finance and accounting operations and maintain the organisation’s financial strategy for earning profits.

The role can be very broad and varied, encompassing a wide range of activities dependent on the type of organisation. However, responsibilities can be loosely grouped under three pillars.  

Leadership/management

Not only is an FD responsible for the performance, wellbeing and training of the accounting team – with all of the management responsibilities that come with that – they also need to ensure that other departments are following financial processes and budgets.

The understanding that they have over these company-wide processes make their insights crucial to informing the business decisions made by a CEO or CFO. This may involve conducting weekly and monthly financial assessments and generating reports to submit to the senior management team.

Monitoring

The monitoring and reporting part of the role extends across the entire business. The position requires oversight over all financial operations and a solid grasp of the goals of the organisation to ensure that everything is moving in the same direction.

This could take various forms including monitoring cash flow, creating financial models, analysing the financial risks and benefits of business initiatives, or allotting funds to projects and monitoring them regularly to ensure that they stay on track financially.

Business strategy                                                              

Where the role has changed the most in recent years is in its evolution into an increasingly strategic role. Functions that would have once been reserved for a business consultant, for example, will now often fall into a Director of Finance’s remit. Such as being involved in top level strategic planning, executing competitor analysis, keeping up with industry trends and anticipating how evolving technology will impact the wider business.

An FD’s understanding of what drives financial expansion makes them well placed to accurately forecast and plan for the future based on expectations. In other words, the role has transitioned from an explainer of the past to a foreseer of the future. 

What is the route to becoming an FD?

From the description of the role, it is clear that a FD position requires a high degree of responsibility and seniority.

To be successful, a combination of education and suitable job experience will be required. FDs need to be partly or fully qualified, but as the role requires a climb through the ranks, and often comes as a result of a promotion, there are additional professional certifications that can be beneficial to attaining the role, including:

• Chartered Financial Analyst (CFA)
• Certified Treasury Professional (CTP)
• Certified Public Accountant (CPA)

Outside of technical expertise there are also ‘softer’, business orientated skills required.

Due to an FD’s multifaceted job role, requiring a liaison between departments, projects, senior team members and stakeholders, time management and prioritisation is crucial.

Because of these different levels of contact, adaptable communication skills are paramount. FDs need to be able to break down complicated financial processes in a clear, jargon free way to non-finance team members. They’ll also need to cooperate with external financial organisations, such as HMRC, and be able to give complex financial information a business context, for senior decision makers.

Critical thinking, problem solving, and analytical skills are also key elements of an FD’s everyday role. It's vital for Directors of Finance to be able to think critically and act responsibly when confronted with complicated financial issues, frequently in fast-paced and stressful circumstances. This quick and accurate decision making relies on a comprehensive understanding of facts or information, and an ability to ask pertinent questions about the data, in order to identify what the problem is and how to solve it.

In this highly connected, fast paced and sometimes challenging world, Directors of Finance need to be able to make sometimes difficult and sometimes unpopular decisions, but they also must be collaborative and optimistic, constantly finding opportunities for growth and improvement. FDs play a crucial part within any organisation and the role offers a hugely rewarding and varied career path. If you’re interested, get in touch today.