Employees engaged in financial management should be motivated by a substantial fixed salary to reduce reliance on variable components tied to the company’s annual performance. Variable components should be introduced for specific projects requiring extraordinary efforts, such as M&A deals, investment rounds, IPOs, audits, or due diligence[2] conducted within tight time frames. This approach applies not only to the financial director, but also extends to key members of the finance department.
Returning to the competencies of a financial professional, they must possess comprehensive knowledge of the business and its operations. A modern financial manager requires a broad perspective and a profound understanding of processes beyond finance and accounting. Even an accounting clerk or cashier and accounts manager must grasp the organization’s business processes, value creation chain, competitive landscape, and consequently, recognize their role in sustaining the company’s performance and growth.
The role of a financial leader also entails selecting the right people and consistently conveying to them the company’s tasks, values, and competitive position. From the employees’ perspective, there should be genuine interest in operational processes, the organization’s strategy, its products, and a recognition of the significance of their role in shaping the overall outcome.
This approach to motivating financial professionals fosters the development of a sufficient level of expertise and engagement in the business, instilling a healthy sense of perfectionism within their tasks and motivating them to pursue common goals. The head of the financial department should possess substantial independence within the management team to effectively oversee control processes and establish an information system for decision-making by product leaders, functional leaders, shareholders, and investors.
Therefore, by maintaining significant independence from business leaders and prioritizing long-term results, the financial leader can offer insights on performance indicators compared to other top executives at board meetings, exhibiting reduced susceptibility to the influence of short-term goals. In turn, this enhances trust in their assessments and significantly reduces, ideally eliminating, conflicts of interest.