FDs taking the centre stage – is yours up to it?

Yet another study has revealed that CFOs and FDs are now coming into their own. All right, it comes from the Chartered Association of Certified Accountants so maybe there is a hint of vested self interest, but even so, there is enough anecdotal evidence out there to suggest that the principles of sound financial management and good business practise are not mutually exclusive in the way that they seemed to be during the recent bubble years. At last we downtrodden finance folk are being given the chance to do what we do best, and save our businesses in the process.

But wait a minute what is this other sound? Desk being cleared and doors slamming shut behind you? Whisper it but some CFOs and FDs are now being “found out”, and that the qualities that made them adequate during the boom years are not suitable for the tough times that are now upon us. At a recent conference I attended, the Managing Director of a respected local business told of how, when faced with a downturn in business last year, he quickly realised that his FD was not up the task and as a result very quickly got himself a new one.

Studies show that 80% of the value of an FD comes from 20% of their time. Much of an FD’s time in many organisations is often spent on managing other functions, such as IT and HR which may not fit their skillsets, or indulging in internal politics. In situations like this, the question a value for money becomes more and more pertinent. If you are paying somebody a package in excess of £100k you would expect them to be performing at this time and showing their true worth. If they are not, it may be time to consider other options.