Absolutely fabulous

The modern finance director needs to be persuasive, entrepreneurial and demonstrate leadership - in addition to being a finance expert and commercially hard-nosed. Perhaps it's time accountants starting thinking of themselves and their roles as fabulous rather than merely factual. Richard Young investigates

Is the idea of a 'fabulous finance director' the stuff of mythology? Far from it. If anything, it's the traditional bean-counter that has disappeared and become the stuff of legend. Great technical accountants have their place, but to take those skills into the boardroom you need vision, leadership, guile and commercial acumen.

'We like fabulous FDs,' says Sarah Hunt, who runs EquityFD, a firm that places finance directors into high-growth and private equity-backed businesses. 'Fabulous, to me, means someone who is instinctively positive, who says, "I'm here to help run a business", not just be an effective accountant. They do what they do for business reasons, not just to develop their finance career.'

A fabulous FD wants to be a businessperson, to make tough decisions around the boardroom table, as well as turn out good accounts. 'They are focused on the whole game, every aspect of the business, not just the function they are in charge of,' says Hunt.

She clearly understands her market. Michael Denny is the recently retired chairman of private equity firm NVM. For him, too, a fabulous FD takes the board discussion to a new level. 'Any FD should have all the numbers at their fingertips,' he says. 'A good FD is one who does well at reading the trends - one who notices that a bank is behaving oddly, or who sees that a currency is shifting, or a market changing. When the MD or the chairman start talking about opportunities affected by these changes, they can provide a context.

'But a fabulous FD takes that a stage further,' says Denny. 'They get a reputation for being "wonderful" by analysing what's happening and giving a valuable opinion. That means not waiting for the MD or the chair to come to them for an evaluation of an option - it's creating options so that the team can make better decisions.'

The problem for many accountants is that FDs are rarely seen as fabulous, making it harder for them to be accepted by less enlightened board members as key contributors to the more creative side of decision-making. 'Accountants are still unfairly viewed as being behind the times,' says Martin Casimir, executive director at information group CCH. 'Despite embracing new ways of thinking and technologies in their professional and personal lives, they are still unable to ditch their stuffy label.'

CCH recently conducted a survey into attitudes about the profession, which confirmed that most people really don't see much that is fabulous about the finance function. Only 28% of the general public recognises accountancy as a dynamic profession that embraces new technologies, compared with 53% of accountants. The good news? Accountants' self-image is definitely edging towards the fabulous. Nearly 80% of accountants under 25 think of the profession as energetic and enthusiastic.

Personality matters

Fabulousness shows itself at the first meeting you have with an FD, Hunt argues. Even your CV will demonstrate whether you have those extra qualities to make the grade. Does it contain a record of the finance function and accounting achievements? Or does it list the outcomes at the organisations you've worked in?

'Being fabulous implies an emotional engagement,' says Hunt. 'When a fabulous FD talks, it's usually about how great their business is and what it has achieved, not how complete their CV looks or what qualifications they have.'

Many FDs are reluctant to gush, which in other walks of life is a key component of being fabulous. But that doesn't mean they need to be dour. 'I don't know whether you'd call it fabulous, but I try to be an optimist in this role, to stay positive whatever the circumstances,' says Jan Long, FD of Kingstown Furniture in Hull. That can be hard as a global recession starts to take hold, but it's more important than ever at times like these.

'At the moment, I am cautious, but it's hard to shake the feeling that we're talking ourselves into a global recession by being overly negative,' says Long. 'In fact, many businesses can benefit from a period of slowdown - as long as they remain creative, positive and determined.'

That's a sentiment shared by a man who knows a thing or two about being an FD under pressure - Eric Tracey. A former Deloitte partner, he's best known for taking on the FD role at two extremely troubled companies: Amey, which was facing a collapsing share price and a breakdown of reporting when he was called in; and Wembley plc, which brought him onto the board during a crisis in its US operations.

'An FD probably needs to be respected rather than liked,' he says. 'If people are swooning over the finance director, he or she is probably not doing the job right. You need someone who can and will say “no” when they have to. That's quite a skill, especially if you do it right and say “no” in a way that doesn't just annoy people and cause them to work around you. You have to be able to communicate your decisions clearly and explain them in a positive way that convinces people it was the right call.'

Fair's fair

That's one of the contradictions inherent in the role. 'Fabulous' for a sales director probably means flashy, expansive and daring. But because FDs have a more considered, balanced role, their pursuit of fabulousness has to be more low key. 'My style is firm but fair - and although it might or might not be seen as fabulous, the key aspect of a good FD is probably an ability to act as the referee,' says Long. 'When you have a difference of opinion between the sales and the ops teams, you have to offer a balanced, informed way of settling things. That becomes particularly pertinent when the MD has a background in one of the disciplines that's involved in the argument - it's much harder for someone who has come up through sales to be seen to settle those disputes without bias, so the FD can be fabulous in those situations just by being objective.'

To expand on Long's football analogy, don't expect to be fabulous in the way of Rooney or Robinho - true fans know when the referee has had a great game because they've been relatively anonymous. They ensure fairness and facilitate - rather than break up - the flow of play. 'It's fine to be fabulous and outspoken, but you need to be able to play that referee role come what may,' she says. 'So the old-fashioned ability to see a problem from all sides and bring to it the objectivity and discipline of the financial angle is critical.'

Cash is critical and business acumen is a must in the boardroom. But the other key component of a fabulous FD is an ability to work with the team. 'Over the next six months, the two key elements are going to be costs and cashflow - you've just got to get on with managing them and not worry about whether you're seen as fabulous necessarily,' says Kevin French, FD at speciality steel producer United Bright Bar. 'But it helps to have a fabulous relationship with your CEO and ops director - that's how you get the business running day-to-day to deliver on those two objectives.'

Remember that if the CEO is highly conservative, that might mean taking on a more outward-facing role. 'That doesn't mean I'd expect to see people pulling circus tricks in the board meeting,' says Hunt. 'We're still talking about FDs, so fabulous doesn't have to mean flamboyant or over the top. It can mean those things, but that's down to the individual style of the FD and how well they adjust that style to dovetail with their CEO.'

Building bridges

Denny can look back on a 20-year relationship with his FD at NVM, Alistair Conn, to see how well that works. 'A lot of the additional value that an FD brings is wrapped up in effective teamwork,' he says. 'A great FD quality is keeping an entrepreneur's feet on the ground without making them frustrated. I would come up with an idea and if it was bad, or breached regulations, or was unprofitable, then Alistair would always say, “No we can't do that, but what we might be able to do is…” and give me options. Non-fabulous FDs tend to either just say “no” or, worse, say “yes” regardless.'

That level of trust will often elevate not just the board's decision-making, but the whole organisation. 'Fabulous FDs have a true feel for it commercially, so they can work with the CEO to deliver on the strategy,' says Tracey. 'At the same time, they must never forget the gatekeeper role that every FD fulfils. There are lots of people, inside and outside the organisation, who are depending on that side of the role.'

For Hunt, that willingness to engage with other people in a flexible, creative way is crucial. 'Fabulous FDs see value in networking - in making connections and showing a bit of imagination about possibilities in any given situation,' she says. 'They don't just wait for the phone to ring - they're keen to open up new avenues.'

The one area where a standard definition of fabulous intersects with its application to FDs is energy. A senior finance person can be energetic without pulling cartwheels. They can bring vigour and presence, even to the role of referee.

'The ideal FD is positive, energetic and keen on finding the right role - not just finding a job,' says Hunt. 'You want them to show true self-belief - but it can go too far. Arrogance or overconfidence in an FD is a particularly bad combination. A fabulous FD is good at taking feedback, which can be critical.'

Ultimately, we're talking about FDs who are positive and self-aware, who are good to talk to. 'They're energy givers, not people who suck the life out of a conversation,' Hunt concludes. 'Energy is a wonderful thing and everyone wants it. So the FDs who generate it - whether the market is booming or slumping, in good times and bad - are the really fabulous ones.'

Richard Young is a freelance writer, editor and conference chair, and former founding editor and publishing director of Real Finance