What Makes a Top FD: The CEO’s Overview
In this series of articles, we speak to local business leaders and financial experts to discover the essential qualities and attributes needed to make it as a top Finance Director (FD).
For this final article in the instalment, we speak with Max Toti, CEO at Captec Group to get the viewpoint on what makes a top FD from an organisation’s highest ranking executive.
In a previous article in this series, Neil Duffy, Finance Operating Partner at Tenzing Private Equity explained how essential it was for the FD to ‘have the CEO’s back’. In this article, we want to explore more about this intrinsic relationship and what key values and attributes play in to this.
Max Toti is the founder and CEO of Captec Group, a flourishing organisation he has grown from a start-up originated in 1985. The group has operations based in the UK and Canada supplying specialist computing technologies in vertical markets across EMEA and North America, including energy, defence and security, transport, healthcare, automation, communications and leisure. With his extensive career and experience as both a CEO and investor, Max is ideally placed to offer his unique insight.
“The relationship between the CEO and FD is at the apex of decision-making and is therefore absolutely vital to ensure business strategy is met and consistently communicated to the rest of the business” stresses Max. “It is imperative the FD is a deeply-trusted counsel to the CEO and at the same time has the strength of character to brainstorm, challenge and debate ideas with the CEO over continuous improvements and strategic initiatives to drive sustainable growth.”
An evolution of needs
What are the essential traits needed for a strong FD, from the CEO’s perspective? It’s a fact that businesses evolve, and therefore this means that so do the skill requirements.
The important attributes needed to make a top FD will ultimately depend on the needs and ambitions of the business, says Max. However, the core traits will remain similar. For Max, one of the most important of these is a passion for the business and its core brand values: “The FD has to want to be there to make a difference and share the values, vision and purpose of the business.”.
Alongside this it’s essential for the FD to have integrity. Max says: “An FD needs to engender trust, not only in the numbers but in their views and opinions – and become a senior trusted advisor.”
What else is an important attribute to a CEO? Good intellect is a must – with the ability for an FD to be able to analyse complex information and then dissect it into bite-sized parts. Commercial astuteness is another important trait; for a CEO – as for all of the business leaders we have interviewed – it’s essential that their FD can understand the business and apply well reasoned common sense to situations.
This also leads into strategic ability – an FD needs to know how to plan and apply this to the business. Max advises: “They need to be solutions led and able to articulate.”
In addition, they must be confident and ambitious and surround themselves with a network of like-minded peers to exchange ideas and learn from. To finish the list, Max says being a collaborative team player is a must: “A good FD should be without ego and able to operate outside of politics.”
How does the ownership structure of a business affect the FD’s skillset requirements? Max feels that several core attributes are similarly applicable regardless of whether an organisation is privately owned, corporate shareholder or private equity, but advises that there are nuances in the skill-set required: “For example, within plc businesses there is the need to manage investor relations. There is heightened pressure within this environment to deliver results to market expectations and manage relationships; which requires increased sophistication in communication, presentation and persuasion skills.”
Can FDs make these transitions? Absolutely says Max, “provided they have ambition with a desire to learn and stretch beyond their comfort zone into the ‘growth zone’.”
The challenges of running a business through a pandemic
The challenges of Covid-19 have impacted every aspect of business – but how has the pandemic impacted the role of an FD and what are the main lessons taken from this experience?
Max says: “The pandemic has tested the ability of the FD to react and adapt in more uncertain, ambiguous and often volatile circumstances. The old adage “It’s easy to be a War General in peace time but the true test is when war breaks out” has never been truer.”
The extra challenges of remote working and maintaining relationships with the CEO and the rest of the board without face-to-face meetings have added pressure to many businesses. Max says: “Across the business opportunities for situational touch points together with the fluidity/information sharing of being in the office, have compromised ‘communications and coaching opportunities’. It means we have had to work harder to maintain a consistent dialogue and relationships.”
Although working remotely has changed the dynamic of some relationships for Max and his team, it’s been an opportunity to strengthen adaptability and resilience. As a result, the 2021 comeback has been far stronger than the 2020 setback.
Looking to the future
With the impact of broader trends such as agile working and the opportunities of having Millennials and Gen Z in the workforce – how will the role of the FD evolve and adapt over the next five years?
Max envisions that businesses will see even greater focus on creating proactive shareholder and stakeholder value and not being solely focused on lagging reporting. He says “The rear-view-mirror approach has become outdated and far greater emphasis will be placed on driving forward-looking opportunities, risks and outcomes.”
All of this will require the FD to have a greater understanding and involvement with Environmental, social and corporate governance (ESG) and wider external factors such as threats to the business, volatility etc, says Max. An example of this is supply chain imbalance – this understanding must then be applied to business decisions.
Growing into the role
What are the major pitfalls facing a young or inexperienced FD in terms of the relationship with their Managing Director?
Max says: “As you are growing as an FD or finance professional, you need to ensure you stay grounded and work on honing skills well beyond just technical accounting” Max advises that these wider skills are “as important as the more obvious accounting and communication skills, to enable you to lead a team and interact effectively within the business.”
Developing the confidence to drive and challenge the strategy and performance of a business is integral to supporting and working effectively alongside a CEO. “This needs to be done in a well-constructed, persuasive manner and delivered in a professional way” cautions Max.
For young finance professionals with FD aspirations, Max advises to always ask for increased opportunities and volunteer to learn as many parts of your boss’ job as possible: “This will leave you well-placed for promotion when the opportunity presents itself.”
And finally, ensure you look up at the bigger picture of the business, and don’t lose perspective in the details of the numbers says Max: “Look at the business through a telescope, look at the numbers through a microscope”.