The responsibilities and qualities of a Finance Director

At present, the macro economy is accelerating into a headwind period that puts the global economy at risk of recession. Geopolitical conflicts, supply chain disruptions, US dollar interest rate hikes, and high inflation are hitting global capital markets in turn. According to the World Bank, the potential global economic growth rate may fall to its lowest level in 30 years by 20301. With the global economy facing strong uncertainties and various unexpected risks, the continuing development of Chinese enterprises depends on sustainable value creation.

The Finance Director, as one of the core managers of an enterprise, can help the enterprise achieve financial objectives, optimize capital structure, and improve efficiency and profits by combining enterprise development strategy and financial management. They play an important supporting role for Chinese enterprises to continuously seek innovation and breakthroughs in global competition, as well as to cope with risks and challenges. So, what are the responsibilities of a Finance Director? What makes a good Finance Director? This article will give you the answer.

Responsibilities of the Finance Director

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Finance Directors may have different roles in different companies and industries, but they usually have the following responsibilities:

Financial strategy: The Finance Director needs to have a strategic vision and formulate and execute financial strategies according to the development goals and strategies of the company in aspects such as raising capital, asset allocation, cost control, risk management, and return on investments. In addition, the Finance Director needs to communicate and coordinate with other senior managers, provide financial suggestions and programs for the company's decision-making, and provide financial support for the long-term development and competitiveness of the company.

Financial operations: The Finance Director needs to consider major and core operational management issues, propose constructive plans, and provide professional advice for the development of the company. Safeguarding the economic value of the company by overseeing and managing the day-to-day operations of the finance department is the most important responsibility of the Finance Director. It involves financial accounting, financial statements, cash flow, assets and liabilities, receivables and payables, inventory, fixed assets, etc. The Finance Director needs to ensure the accuracy and timeliness of financial data, improve the efficiency and quality of the finance department, and provide financial data and information for the operation and management of the company.

Financial compliance: The company needs to comply with and enforce national and regional financial regulations and standards, including accounting standards, tax regulations, audit practices, and internal controls. The Finance Director needs to maintain good communication and cooperation with external institutions or personnel such as the government, banks, auditors, and lawyers, to deal with finance-related affairs and issues, and to provide protection for the compliance and reputation of the company.

Financial risk: By identifying and assessing financial-related market risk, credit risk, liquidity risk, operational risk, compliance risk, etc., the Finance Director is required to develop and implement financial risk management strategies and measures, including risk prevention, risk transfer, risk control, and risk response. The Finance Director needs to report and deal with financial risk events in a timely manner to provide protection for the stability and security of the company.

Necessary skills to be a good Finance Director

A good Finance Director needs to have a solid professional ability involving eight elements which include budget, cost, performance, investment and financing, risk management, data governance, information disclosure, and tax planning. This often requires an academic background in business, commerce, finance or economics as well as certificates for professional skills such as accountant, CPA, CTA, senior accountant, ACCA, and CFA. Furthermore, extensive work experience is also very important. A Finance Director needs to have more than 10 years of experience in financial management, financial accounting management, and financial engineering, and experience in accounting firms such as PWC, KPMG, DTT and EY is helpful in becoming a Finance Director.

In addition, a good Finance Director also needs to have the following abilities and qualities:

Strategic thinking: The Finance Director needs to have a strategic mindset and be able to view the development and financial issues of the company from a macro and long-term perspective. In addition, the Finance Director needs to be able to formulate and implement financial strategies in line with the company's strategy based on his/her understanding of the operating environment of the organization, and provide valuable financial suggestions and programs for the company's decision-making.

Leadership: The Finance Director must be able to lead and manage the work of the finance department, including:

The construction, training, motivation, supervision, assessment, and performance improvement of the finance team;

Allocation, utilization, control, and optimization of financial resources; and

Establishment, improvement, implementation and supervision of financial systems.

The ability to conduct business insight analysis: The Finance Director should have good business analysis ability and keen insight into the macro environment, industry trends, and their own business. The Finance Director should also be able to use financial data and information to conduct financial analysis, assessment, prediction, and diagnosis, to help companies optimize and improve their financial status and seize business opportunities.

Innovation and learning ability: The Finance Director needs to be able to innovate and learn continuously. On the one hand, he/she should have the ability to adapt to and cope with the changes and challenges of the financial environment; on the other hand, he/she should be able to carry out financial innovation, optimization and reform, to provide financial impetus and breakthroughs in the performance of the company.

Communication ability: The Finance Director needs to be able to communicate and collaborate effectively with managers at all levels, employees, customers, suppliers, investors, regulators and other parties to establish and maintain a good financial relationship and achieve financial objectives, including the transmission of financial information, the expression of financial needs, and the negotiation of financial interests.

Professional ethics and literacy: Strong ethical leadership and good governance by the Finance Director is a prerequisite for sustainable value creation. This requires them not only to comply with laws and regulations, but also to adhere to the following basic principles: integrity, objectivity, professional competence, and confidentiality. The Finance Director is responsible for ensuring that high ethical standards are observed throughout the organization by demonstrating and encouraging professional, ethical behavior and encouraging senior management to actively demonstrate that the organization values ethical behavior when necessary.

The Finance Director is one of the most important and critical senior managers in modern corporate governance, with responsibilities covering all aspects of financial work, including financial strategy, operations, compliance and risk management. A successful CFO needs to have a wealth of financial theoretical knowledge and practical experience. In addition, the Finance Director needs to possess strategic thinking, leadership, the ability for business insight analysis, innovation and learning ability, communication ability, and professional ethics and literacy. If you are interested in becoming a Finance Director, please visit our website. We will provide you with professional consulting and recruitment services to help you achieve your career goals and dreams.

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