A Financial Director is a senior member of a finance team and the business. They usually run the finance department, or answer directly to the CFO.
A Finance Director/CFO is usually an executive level position, often answering directly to the CEO and sitting on the board of directors. In many cases of a CEO leaving or being away, the CFO often steps up as the acting head of the business.
They are responsible for a companies financial health, which they achieve by managing strategic and operational roles, while overseeing management accounting and finances.
A well run business has a long term financial strategy, which makes a big part of the companies long term plan. This is the Finance Directors responsibility.
As well as having strong internal relations, the Financial Director must have strong relations with important external stakeholders. Such as banks, shareholders, auditors and major clients and suppliers.
How to Become a Finance Director
Becoming a finance director is a long term plan for many accountants due to being both an interesting and well paid role.
So how do you become a finance director?
You need three key things to become a finance director.
- Accountancy qualification is a must.
- Strong management experience.
- Experience in a senior accountancy role (Financial Controller, Head of Finance etc)
Firstly, an accountancy qualification such as CIMA or ACCA is a must. Every job spec you will ever find for a finance director role will mention they require them to be fully qualified.
Strong management experience is the second pre-requisite. Even a small finance team has several staff members and you need to prove that you’re able to keep the team motivated and working well. It also greatly helps if you have evidence of developing members of finance (such as helping an accounts assistant become a management accountant).
You need to have experience in the number two position in finance. Which is usually head of finance or being a financial controller. Both these roles give you access to the strategic elements of a finance director, and is a fantastic stepping stone in getting your CV ready for that first Financial director role.
After that you want as much high level finance experience as possible. This can include being involved with an acquisition & merger. If your business is owned by private equity, then having a relationship with them is great. Many companies are owned by private equity and having examples of working with them will put you in a strong position.
Financial Director Salary
So this is one of the reasons you want to become the CFO of a business. The salary is usually pretty good!
In the UK the average salary for a finance director is £100k, going up to £130k in London. Many CFO’s at larger companies enjoy salaries far higher than this though. In New York many companies would pay a CFO closer to $400k (plus bonuses!).
If the company is run by a private equity firm, you might get offered the ability to buy a small stake in the business. A private equity company usually buys a business with the view of making it far more valuable. Then they try and sell it three to five years later. As an equity director, you get a nice bit of money from the sale!