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What is a Finance Director?

Mary McMahon
By
Updated Mar 02, 2024
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A finance director is someone who oversees the finances of an organization, business, institution, or agency. Someone who holds this position may also be described as the Chief Financial Officer (CFO). His or her job is to make sure that the finances are kept in order, and to communicate information about financial issues to other members of the organization and to the general public, in the case of finance directors who work for organizations which are accountable to the public or to stockholders.

In order to become a finance director, someone may have a background in accounting, or hold a Master's in Business Administration (MBA). Concerns about creative accounting in the corporate world have led some nations to require that finance directors or at least one member of the board of directors hold accounting qualifications. This is designed to ensure that people with accounting expertise are involved in decisions which impact a company's accounting practices.

Finance directors manage financial risks, helping the people they work for invest wisely and manage their finances intelligently. They also deal with issues like long term financial planning, financial record keeping, budgeting, and issuing financial reports as required by convention or by law. Finance directors usually belong to the board of directors, reporting to the board when they make decisions or have recommendations, and the finance director is accountable if a company is audited and its financial practices are called into question.

Job skills required from a finance director are diverse. They need to be good with money, but they also need to have excellent people skills so that they can communicate about financial issues and cooperate with other members of their organizations to get goals accomplished. They also need to be familiar with the laws which pertain to the organizations they work for, and with industry-wide accounting standards and practices. This work also requires an attention to detail, the perceptiveness to deal with diverse people and situations, and the ability to make difficult choices which are in the long term best interests of an organization even if they are painful in the short term.

If a financial director works for a corporation, his or her salary is likely to be very good. The pay scale starts to decline as finance directors move into the nonprofit and government sector, because positions in these sectors pay less generally, even though they are just as important. Institutions like colleges, universities, and research facilities may offer varying salaries to a finance director depending on their size, endowment, and policies in regards to executive and administrative pay.

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Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a Practical Adult Insights researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By sapphire12 — On Feb 26, 2011

Many colleges and universities pay their administrative increasingly high amounts. I imagine that it would be a fairly good level of pay to direct finance at one of these institutions, though my hope would be that a good finance director would be willing to make suggestions about things like tuition without thinking about how it might affect his or her pay- for example, advising a smaller increase in tuition might mean the administrative sector receives less or no raise, but it would help many students.

By vogueknit17 — On Feb 25, 2011

I think it's a sad truth that people who are willing to offer these sorts of services to nonprofit organizations often work for far less money. However, in finance director jobs, that doesn't really mean they take much of a pay cut- you can still make a good living working in finance, even in more nonprofit cases.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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