In the executive search business I'm normally called by chief executives and managing directors when they feel that some members of their senior team need replacing, or at least need to be compared against what is “out there in the market”. Therefore, I have plenty of opportunities to hear at first hand, and in undiluted terms, chief executives officers' (CEO) views on the performance of their fellow directors – and finance directors in particular. More frequently than not, there is a list of adjectives to describe the actual performance of the incumbent and a different list to describe what they want going forward. Which of these would your CEO use to describe you – detail-conscious, big-picture thinker, creative, rigorous, problem solving, influencer, intellectually able, leader, people developer, mentor...heir apparent. Or...overpaid bookkeeper?

So what are chief executives looking for in their finance directors these days? Clearly there is no one simple answer as this will depend upon a plethora of factors such as the business's sector, market conditions, scale and complexity, culture and immediate plans, to name just a very few. But there are clear themes that emerge when looking at those finance directors who are the apple of their CEO's eye, and who are most likely to be considered themselves as CEOs of the future.

Basic number crunching

Underpinning the requirements for most finance directors is the need for a firm foundation in financial management so that, as an absolute minimum, they can provide the necessary financial perspective on the business, recognising and managing financially related risks, identifying opportunities and eliminating waste. But this doesn't mean just being able to compile the routine accounts and management information and feeling a little smug that they are the only member of the board to understand how the numbers were put together. The successful finance director should be driving the agenda by making financially related management information more incisive, more accessible, more real-time and even more forward looking. But these abilities only really get you to the starting post – and are what more junior members of the team should be doing anyway.

We hear a great deal about the ability to think strategically and contribute at a broader big-picture level – and these qualities certainly start to mark out the strong finance director from the rest. But what do we really mean by strategic thinking? Perhaps rather cynically, I have to say that over the years, meeting many hundreds of candidates, one frequently sees the weaker ones latching onto the strategic thinking aspects of the specification and feeling that therein lies their salvation. They think that a lack of ability in other areas can be compensated for by a well-honed ability to chat over coffee with colleagues about ethereal matters – they're wrong.

The ability to effectively contribute to strategic decision-making almost certainly needs to be based upon experience of broader business issues, gained either in roles having formal responsibility for non-financial areas, or through having made it their business to get out and about and at least gain some depth of understanding of issues outside the finance function.

In my opinion the word strategic has become overused and debased over the past ten or so years, and those claiming strategic ability should expect to have to justify such claims with solid examples. Closely related to strategic ability is an interest in broader issues of the market - what we might call business general knowledge.

FD didn't have a clue

I can recall one chief executive telling me that following the announcement of a proposed merger of two companies in a related field, his operations and marketing directors beat a path to his office within minutes, examining the potential threats and opportunities, but that the finance director made no such contributions and didn't even seem to be aware of the proposed merger's significance. We all expect the marketing director to know in some depth about competitors, again experience drives me to conclude that some also-ran finance directors take only a superficial interest in broader market issues.

Any heir apparent finance director must also demonstrate leadership ability The ability to deliver significant, positive change through people is a rare but incredibly valuable skill. We are not talking here about just managing a team and keeping the lid on things. How many of us could really talk about solid examples of our leadership ability for just 10 minutes without hesitation, repetition or deviation? The finance director who is a credible heir apparent to the CEO should have no problem.

Does the CEO's office await?

The finance director is in a uniquely strong position to further his or her career by moving into the CEO role. Rigorous financial training together with early opportunities to contribute to other parts of the business and staff management will continue to provide excellent foundations from which to move into general management. But only those who really grasp the opportunities to develop can hope to blaze a trail to the CEO's office. The prospects for those finance directors with genuine depth and breadth of ability are excellent – CEOs and managing directors in major companies are more likely to have come from the finance function than any other function. But those within the finance function who don't have the required qualities beware – technology and outsourcing are the low-cost, high-efficiency answer to many routine accounting tasks. Only those who can demonstrate that they are adding value by leading proactive and outward looking finance functions will have any degree of security in the future.

  • Tim Latham is the principal of Director Resourcing; a London-based search and selection consultancy. The website address is