What skills does a good CFO or Finance Director need?

Feb 18, 2020 | Key Business skills, Recruitment

For as long as I have been writing and speaking about the future I have been stressing that finance professionals need to develop their business skills. Being technically competent and up to date is not enough. That’s like having a basic cake mix – without any flavouring, decoration or colour. It’s rarely enough.

I talk about a number of areas that you might want to consider – keeping in mind that you need to focus on those skills relevant to both your current role and the roles you might hold in the future.  Some skills will be more important than others. This is true for accountants in practice as well as for those in business.

Recently I was interviewed for the Soldo blog where I was asked to share my views as to the changing relationship between CFOs and accountants. You can read the interview here >>>

And then, shortly after that interview took place I came across a white paper from Acuity Associates: The 5D Finance Director. The author, Ben Mekie, himself an experienced CFO, appears, at first glance, to take a different view to me. In his experience a modern CFO will be able to perform well across 5 key dimensions:

  • A Scorer: This is the traditional role, ensuring proper accounting records are maintained and statutory reporting, tax and other obligations are met
  • A Custodian: Another key area for the traditional FD, ensuring the finances of the business are improved by setting and monitoring against plan

But the modern CFO/FD (and I would add, those that want to be of value in the medium to long-term) also need to be

  • A Strategist: Crystallising strategic objectives into a coherent and cohesive plan. Requiring suitable experience in the areas of Business and financial strategy,  Growth and Funding.
  • A Catalyst: Ensuring consistency of understanding and assumptions across the business
  • A Business partner: Working with colleagues outside finance to understand their issues and help them achieve their objectives

What I love about this white paper is the level of detail it contains as regards each of the 5 dimensions.  In each case Ben has summarised a series of specific responsibilities and abilities. Against each of these he has noted the risks if the candidate doesn’t have the skill and the opportunities that will flow if the skill exists to an appropriate level.

This could be exceptionally useful to Business Owners looking to recruit their first FD as well to CEOs and COOs who want to assess whether a candidate has the necessary broad range of skills and experience.

This should also be instructive to accountants in practice hoping to encourage clients to outsource such support needs to them rather that to recruit a full-time CFO.

Implied rather then spelled out is the fact that you only need be concerned about a CFO’s experience across those skills that will be relevant to the company or group in question. The bigger and more complex the business, the more likely you will want someone with the broadest range of skills and experience across all 5 dimensions.

I understand that the catalyst for the white paper was Ben’s frustration with the inability of recruiters to provide consistently competent candidates for CFO roles. Founded in 2007, Acuity Associates’ mission is to strengthen finance teams through the application of The Acuity Method which validates skills as distinct from psychometric tools.

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