Why the Board needs to keep a close eye on the Finance function

Boards don’t need reminding that the Finance function is critical to the strategic success of a business.  Capital raising and allocation, funding, modelling, performance measurement, external reporting, treasury risk management, cash flow forecasting, cost management, budgeting, project monitoring…the list of critical roles and responsibilities just goes on.  But how often do Boards look at how the finance function is playing this strategic role across the business?   Is it really is working at the heart of strategic decision-making – and seen as strategic by others?  And how can they reassure themselves that Finance is contributing as much as possible to business success??

We are working with AICPA & CIMA to provide Boards and the CFO with a tool (Thinking Finance®) which gives insight into how Finance is performing against good practice standards – and what the rest of the organisation thinks about the value Finance brings.  In developing our thinking for this, some thoughts for directors became clear.  Here we outline a few good practices for Boards, along with some things to avoid.