In medium-sized and large privately-owned companies, decision-making mechanisms may lack structure and systemization, leading to interpretation challenges, decision delays, and personal risks for management personnel.

While the division of responsibilities between the company’s operational management and the board of directors is typically simpler and regulated by legislation, bylaws, and shareholder agreements, «gray areas» are still encountered here. The shareholders sometimes intentionally leave open issues in the internal decision-making process in order to retain additional leverage over the management. Having «gray areas» is not a problem, but it is crucial for senior management to understand where the boundary lies between their authority and the responsibilities of the board of directors and shareholders. They should also have a clear understanding of the segments within the «gray area».

Hence, during the hiring process, prospective financial directors should directly address pertinent issues with stakeholders. This includes inquiring about existing processes and procedures, decision-making approaches, documentation preparation, and the attitudes of leaders and the board of directors toward potential changes within the CFO’s domain.

Engaging in targeted discussions with stakeholders during the preliminary stages of collaboration allows decision-makers, such as the CEO, board of directors, and shareholders – those who ultimately make the decision to hire a financial director and interact with them – to understand and evaluate the motives and objectives of the potential CFO. This approach facilitates the selection of appropriate negotiation tactics and criteria for identifying suitable candidates.

It’s essential to acknowledge that hiring a leader entails a long-term commitment and, typically, no one is directly interested in deception. However, in practice, the opposite situation often arises: when choosing a partner for a long and fruitful collaboration, parties may, due to oversight or insufficient preliminary analysis, engage in self-deception. Correcting such mistakes can be arduous, time-consuming, and costly. With this groundwork laid, let’s proceed to discuss goal-setting and employee motivation.

The cornerstone of any enterprise lies in meeting the demands of its clientele. Enterprises arise where needs are unmet and fade away when customers no longer require their offerings, often due to the emergence of alternatives or more efficient competitors. If a product becomes redundant or can be fulfilled without the enterprise’s involvement, customers will seek alternative solutions, potentially leading to the enterprise’s insolvency.

The principles guiding internal services within an organization should echo this viewpoint: it is imperative to continually identify and address customer pain points while striving to make this process as cost-effective as possible, all the while enhancing customer satisfaction. Anything extraneous, artificial or coerced will naturally diminish over time; hence, processes should align with the casual, day-to-day needs of the customer.

In the realm of finance, this entails bolstering decision-making, managing assets, reducing risks, and, importantly, financing the enterprise itself in a comprehensive sense. Adherence to tax authorities and other governmental structures is only fulfilled because it is an integral aspect of asset and risk management processes. Shareholders, encompassing equity, bond, and other debt or convertible securities holders, credit note holders, long-term investors, and creditors within project and syndicated financing, stand as some of the most critical clients for the finance department.