Finance directors warned to be bold for growth

The research, carried out by the Directorbank Group, argues that the ideal finance director should be a visionary, who can protect the bottom line while seeking investment.

"He is the opposite of the time honoured stereotype of the timid accountant, dreaming of becoming a lion tamer in the famous Monty Python sketch,'' said John Pearce, the executive director of The Directorbank Group. "Perhaps he has learnt to tame lions after all."

In the report, which was produced in association with Grant Thornton, some of Britain's leading finance directors (FDs) urge their peers to be brave, despite the economic uncertainty caused by the public spending cuts.

Finance directors should be looking to exploit their competitors' weaknesses and identify growth opportunities that exist in every market, the FDs argue.

The report – What makes an Outstanding FD? – was officially launched at an event which attracted 70 Yorkshire business leaders to Grant Thornton's office in Leeds.

Nearly 350 directors – chairmen, chief executives and executive directors – were asked to nominate outstanding finance directors they had worked with. Twenty five of these outstanding FDs were interviewed and asked to offer advice to their peers.

In the report Richard Pennycook, the group finance director at Bradford-based supermarket chain Morrisons, says: "You've got to have that commercial and strategic awareness. The functional, specialist piece is a given. You absolutely have to have a feel for how your business operates, what its strategy should be and the support the CEO in that strategic journey. You also need the strength of character to say 'no' if you don't agree with your CEO."

Mr Pearce said: "Today's outstanding FD emerges as a much more rounded, commercial business leader than his or her counterpart of 10 or 20 years ago. He is forward looking and making brave decisions. He is a great communicator who can win the trust of colleagues across the business and is a partner to the chief executive.

"Closer to the customer than most would expect, he really understands what drives wealth creation and where the money is made."

Three-quarters of the directors surveyed said they had worked with an outstanding FD. The same number said they had worked with an FD who wasn't up to the job.

While the inept FDs had usually been fired, directors were asked if, with hindsight, they would have done anything differently.

Of those answering this question, 40 per cent said they should have acted sooner. A quarter said the FD stayed on but should have been sacked.

An incompetent FD can have a devastating effect on confidence, the survey says.

The signs of a mediocre FD include late financial reports, a lack of attention to detail and poor forecasts.

Jonathan Riley, the managing partner in Grant Thornton's Leeds office, said: "It's not enough just to be a technician. You've got to be a salesman, diplomat, politician and negotiator. Many CEOs comes from finance director positions."

Jonathan Hick, the founder of Directorbank, said: "In the private equity market, which is Directorbank's heartland, communication skills are crucial for all of the board.

"You can have the best CV on earth but if you can't communicate you won't get past the first interview with a private equity board. You need strong-minded people who can say their piece."