Whilst much has changed since The Seven Hats of the FD was published (ICAEW, 2011), its key themes still resonate. The authors sought to foresee how the role of the Finance Director would evolve as well as how the individual skill set, profile and characteristics would need to change to meet these new demands. In summary, they argued the ‘New FD’ should be a:
- Storyteller: Creator of a clear narrative for internal and external audiences.
- Co-pilot: Partner to the CEO with a complementary skill set.
- Magistrate: Arbiter of disputes and enforcer of the law.
- Consigliere: Trusted counsel offering advice at the highest level.
- Engineer: Master of processes and systems; architect of business models.
- Muse: Promoter of fresh thinking and value-enhancing decisions.
- Rescue service: Identifier of problems and presenter of solutions.
Similarly, Dun & Bradstreet released a study in 2017 entitled The Evolution of the Modern Finance Leader,which supported the trends noted in a recent Norman Broadbent Group White Paper. In summary, Dun & Bradstreet noted the following:
- Great Expectations: The face of finance is changing at a rapid pace.
- Under Pressure: Finance leaders are under pressure to do more with less.
- Smarter Decisions: Finance leaders must fuel growth with data.
- High Risk: Finance Leaders face the danger of conflicting priorities.
In effect, Dun & Bradstreet argue that today’s Finance Directors are not handing over financial guardianship, but are being asked to do more to contribute to business growth. Many would argue this is nothing new; however, the message is ‘less time spent down in the weeds and more time looking ahead’. Finance Directors have to become more comfortable with uncertainty, drive change and be more accepting of radical solutions. Naturally, no one is advocating a complete reversal of their instinctive conservatism, however there are clearly occasions when a ‘low-risk/no-risk’ default position may not be best.
Alongside technical acumen, commercial and leadership intelligence are critical in ensuring Finance Directors play the combined roles of strategist, operator, leader, steward and catalyst for change. With these increasing demands, it is becoming more challenging for businesses to find the right mix of skills, attitude and competencies when appointing a Finance Director. Boards find it difficult to prioritise which competencies are most critical to business success and even when they do, assessing candidates based solely on the most rigorous interview process is far from perfect.