Rui Domingues thinks it’s time to adopt a more swashbuckling approach to financial leadership.

CFG’S annual conference last month was, as usual, a stimulating event. In particular, the closing plenary was entertaining and thought-provoking.

However, with four different CEOs giving their views on what they believe is needed from today’s finance director, I left confused as to whether I should continue counting my beans or should enrol on a ‘swashbuckling course’ to liberate my attitude to managing charity finances.

Moving from this sort of general discussion to something more tangible can be difficult, but the Institute for Government (in partnership with CIMA) produced a useful guide in April called Financial Leadership for Government.

This publication aims to look at how financial leaders (specifically in the public sector) should change how they balance their time. There are some good ideas here for us in the charity world as well.

Tangible guidance

They break down a finance leader’s role into three broad categories:

• Traditional internal functions focused around the control of money and budgets;
• Evolving strategic functions that support management and decision-making across the entity; and
• Longstanding external relationship functions.

In terms of the money and budgets aspect, this is of course the stock-in-trade of any finance professional. Controlling these items is a key function, involving designing and co-ordinating the budget and business-planning cycles, controlling expenditure and internally auditing the effectiveness of controls and processes.

The second area of strategic support is probably the area that the chief executives at the conference were looking for us to develop and provide leadership on.

In fact, it would also appear to be in our self-interest as FDs to develop in this area, as a recent charity finance salary survey showed that there is a strong correlation between involvement in strategic work and job satisfaction for senior finance professionals.

The final area, external relationships, concerns the production of the annual accounts, external compliance and funding or treasury operations.

When I sat down and looked at my time in relation to these activities over the last year (after taking out my time spent on nonfinancial responsibilities, like ICT), I could see that approximately 90 per cent of my time has been spent on the first and third areas.

So, are CEOs right to say that financial leaders need to be more strategically focused?

In my view the answer is: ‘It depends’. How much of your time you put into different areas will depend on many factors: like what contribution is needed to complement the skills of your CEO and senior colleagues; where your charity is in its strategic cycle; or how your existing finances are looking right now.

Over the last year at Friends of the Elderly, like so many other charities, we have been looking at things like budgetary control, cementing our sources of income, and ensuring external compliance. There has been less of a focus on the second area of strategic support and performance management.

Next year’s objectives

Three weeks ago I had my annual appraisal with our CEO, Richard Furze. As normal, it was a good, honest meeting. We looked at setting goals for the next year.

Of my six key finance-related objectives for next year, five fall into the strategic support category, including:

• Introducing a new performance management system;
• Conducting a strategic review of a business stream;
• Reviewing our cost-effectiveness in key areas;
• Integrating a subsidiary’s functions into the charity; and
• Investigating a new charging basis for some of our services.

So maybe the panel at the conference was right; perhaps CEOs are indeed looking for finance leaders to be more strategic in their outlook. I think it’s time for this FD to become a swashbuckler.

Rui Domingues is finance director at Friends of the Elderly