Continue reading
Remit
While there has been progress with ensuring financial people have the correct remit in some jurisdictions government, for example following the Likierman and Keegan reforms in the UK – in most cases reform efforts have not gone far enough or been fully embedded.
Ultimately financial managers can only make a positive impact on an organisation where they have been empowered and given the remit to do so. While some governments have genuinely brought their senior financial people into empowered executive management positions, in many government organisations, this has not been the case.
Not all organisations have their finance director on the board and many constrain their role to focus more on aspects of reporting than participating in organisational strategy and planning. Too often the finance director sits below board level and reports to a board member such as a Director General of Resources who has a wider remit and is often from a policy discipline background. Such approaches limit the ability of senior financial managers to use their skills effectively for the benefit of the organisation. It also sends out a message that finance is not part of strategic planning or decision making.