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Finance director - then and now

Fifty years ago, Shell’s deputy controller Stanley Harding gave a lecture on the finance professional’s role in business. But how far has it changed since then? The Faculty’s Rick Payne looks back, and the experts respond.

The finance function: always the same and always different

If the CFOs quoted by industry commentators are to be believed, the role of the CFO has changed significantly in the last few years. But what if we found that the challenges and the advice being offered to cope with them were not that dissimilar 50 years ago? Could it be that it does not matter whether things are changing rapidly, it’s just that we never learn? Would it mean that change is less pervasive and having less of an impact?

When researching our report The finance function: a framework for analysis, we discovered a little gem – a lecture given by Stanley Harding, an ICAEW chartered accountant, in 1963. So relevant is the lecture to today’s issues that we decided to republish it together with some expert commentary. We highlight some of the key ideas in the report and consider the importance of learning from history.

The full report, Finance in the broadest sense, is available at icaew.com/ financedirection and as well as the lecture includes an interview with the current Group CFO of Shell, Simon Henry, and commentaries from leading academics looking at the 1960s context and the development of the role of the finance professional in the 1980s and 1990s. 

The three hats of the finance manager

“We expect a finance manager in an operating company, where most of the money is made or lost, to wear three hats. The first as the financial expert, the second as an active (not a non-playing) member of the management team and the third as the manager of the financial and accounting staff …” (Harding 1963)

Clearly there has been a lot of inflation since 1963 so I think we are up to seven hats at the moment. The key points remain though – senior finance professionals in business have to contend with multiple and sometimes conflicting roles and they are expected to participate fully in the management team.

This is an extract from the Finance & Management Magazine, Issue 208, March 2013.

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