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s Ireland and the rest of the worldcontinue to grapple with news offurther economic crisis three yearson from the collapse of Lehmans,Finance Directors (FDs) find

themselves in the eye of the storm, taskedwith steering their organisations to calmerwaters and, in some cases, a return toprofitability. As pivotal members of thesenior management team, their input is vitalin terms of contributing to the smoothrunning of their organisations andsafeguarding the company assets. Many ofthe key personal skills required by FDs areessentially the same whether we’re referringto a small family-run enterprise or a globalconglomerate, yet nuances exist dependingon the particular role and the industry.

Within the executive search space,organisations are now investing increasedtime and resources when selecting seniormanagement such as Finance Directors. Inmany companies, the FD is second incommand to the Managing Director orChief Executive Officer and often deputises

in their absence, thus he or she mustdemonstrate a comparable skillset. Theidentification, appointment and subsequentretention of the preferred individual isparamount and companies cannot afford toerr in their selection, both in fiscal terms asexecutive level hires command high salaries,but more crucially in terms of theirorganisational fit. The process has evolvedover the years and is now carefullychoreographed to ensure the desired resultis achieved. This includes initial screeningwhere a comprehensive checklist of criterianeeds to be met by applicants in order forthem to merit consideration, followed by aseries of interviews and, in most cases,psychometric testing to enhance thepredictive accuracy of the assessment andselection process. While certain ‘corecompetencies’ were always viewed asessential, the focus has shifted from a relianceon technical ability to a greater emphasis onassessing personal attributes or ‘soft skills’.

Daniel Goleman can be credited withbringing the term ‘Emotional Intelligence’

(EI) into our consciousness in his 1995 bookof that name. EI refers to the ‘soft’ skills weare all familiar with. Having conductedresearch at almost 200 global companies, heasserts that while the qualities traditionallyassociated with leadership – intelligence,toughness, determination and vision – arerequired for success, they are insufficient.Truly effective leaders are also distinguishedby a high degree of emotional intelligenceincluding self-awareness, self-regulation,motivation, empathy and social skills. Hisstudies show that if we examine the ratio oftechnical skills, IQ and emotionalintelligence as ingredients of excellentperformance, emotional intelligence is twiceas important as the others. He believes thatEI increases with age but cautions that evenwith maturity, some people still needtraining to enhance their EI. The investmentis worthwhile since EI plays an increasinglyimportant role at the highest levels oforganisations, where differences in technicalskills are negligible. The crux of Goleman’sthinking is that ‘IQ and technical skills are

A

KEYPERSONAL

SKILLS OF THE

FINANCEDIRECTOR

As companies invest increased time and resources in selecting senior management, Margaret Friel describes

the more sought-after personal skills.

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important, but emotional intelligence is thesine qua non of leadership’.

So how does this relate to the FinanceDirector and what are the key characteristicsthat are most relevant in his or her role?Proven academic ability and technicalexpertise are invariably viewed as pre-requisites at this level, since the FD’s remitencompasses overseeing the work of a teamcharged with shedding light on thecompany’s financial health or otherwise.They must demonstrate a high level ofstewardship, attention to detail and strongtime management skills and should ensurethat all reporting on behalf of theirorganisation is accurate and timely. However,while the technical attributes are important,it is the additional personal or ‘soft’ skills thatwill differentiate an exceptional FD fromone who is merely competent.

Self-management and the ability tomanage relationships with others both comeunder the realm of emotional intelligenceand arguably rank as the most crucial of allthe desired skills since they permeate all

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facets of the Finance Director’s role. As wellas being tasked with leading, motivating anddeveloping internal teams of staff, theincumbent must liaise effectively with theCEO, other board members and externalparties including shareholders, investors, keysuppliers and customers. A more consul-tative approach than heretofore has becomecommonplace, with the result that full trans-parency and accountability is expected.

Necessary skills of the Finance Directorwill vary according to the type of organ-isation in which they work. In some cases,the role tends to be very ‘hands-on’, whereasin others, it is more strategic. The FD in ashared services centre, for example, wouldrequire stronger team management and staffdevelopment capability than his or hercounterpart in a private equity firm wherecommercial awareness may be more soughtafter.

Finance Directors employed in com-panies experiencing difficulty accessingcredit are being increasingly called upon toliaise with bank personnel to request more

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times. The key personal attributes they mustexhibit are diverse. While technical andacademic abilities are viewed as ‘thresholdcapabilities’ representing the entry-levelrequirements for executive positions, it is theaccurate assessment of the ‘soft’ skills or‘emotional intelligence’ that is potentiallymore crucial in terms of predicting whetherthe individual is likely to fail or flourish inthe role. This is achieved by way of acomprehensive selection process.

The use of a combination of selectionmethods as part of the recruitment processgreatly enhances its effectiveness. Forexample, conducting behavioural eventinterviews in conjunction with personalityand ability tests offers increased accuracy inselecting candidates who will be successfulin the job, rather than using any single othermethod in isolation.

Psychometric/EI testing may appear tobe an expensive outlay for companies withcash flow concerns in these straitened timesbut it represents a necessary cost which hasthe potential to reap manifold dividends.Failure to invest the required resources insourcing the most suitable individual for therole will ultimately cost significantly morein the long term. Hiring organisationswondering ‘can we afford to do it?’ shouldperhaps rephrase the question and askthemselves ‘can we afford not to do it?’Margaret Friel, ACA, is an Associate withAccreate Executive Search.

favourable financial arrangements. Thisrequires effective negotiation and strongrelationship management prowess. Sincecash is the lifeblood of any company, theimportance of these skills should not beunderestimated. Crisis management and theability to handle stress have gained greatersignificance as more and more firms findthemselves in financial quagmire situations.As ‘fire-fighting’ has become the norm, it isincumbent upon Finance Directors toconfidently steer their teams and provideguidance where necessary.

High integrity, honesty and trust-worthiness are additional desired char-acteristics at a time when fraudulentpractices are being diligently investigatedand steadfastly opposed. Although mis-appropriation and mismanagement of fundsoccurs in only a fraction of organisations,their effects are hugely detrimental.Although FDs are themselves under thespotlight, they must also act as watchdogsover their team members.

Now more than ever, it is also imperativethat Finance Directors keep abreast oflegislative changes and adhere to compliancerequests in what is becoming an increasinglyregulated environment. The requirementsdiffer according to the particular industrysector the company finds itself in, withfinancial services organisations among themost comprehensively regulated. This stemsin part from the recent work of the Head of

Financial Regulation and Deputy Governorof the Central Bank, Matthew Elderfield andhis team, which has dramatically altered thelandscape of financial regulation in Ireland.With the increased compliance require-ments comes an expectation that FDs shouldhave the aptitude to assume an enhancedlevel of responsibility which in turn resultsin an even greater workload.

Finance Directors should continuallystrive to improve internal processes andprocedures as they lead and drive their teamsforward, constantly challenging the statusquo. They should be adept at managing riskand effecting change. They should be am-bitious on a personal and a company level.The most successful of them will demon-strate a solid work ethic as well as passionand unflagging enthusiasm for their role,leading by example and maintaining apositive outlook so as to foster a ‘can-do’attitude among staff members. Networkingability such as attendance at relevant confer-ences is important to keep informed aboutnew ideas and changing trends. ContinuousProfessional Development will assist inensuring that technical and ‘soft’ skills areenhanced on an ongoing basis.

In conclusion, the expertise of theFinance Director and his or her proficiencyin carrying out their role can undoubtedlybe viewed as more critical now than everbefore in terms of ensuring their company’ssurvival or prosperity in these recessionary

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