Role of the Financial Manager
The role of the financial manager has changed drastically during recent years. Previously, financial managers were seen as the stewards of the organization, since they were responsible to ensure the accountability of all organizational assets and to generate accurate financial reports. Today, their main goal is to maximize shareholder value. In order to achieve this goal, they have to be information managers, cost managers, controllers, consultants, and risk managers. However, there are critics that disagree with this shareholder value approach. Instead, in order to ensure long-term sustainability, financial managers should be focusing on the stakeholder value. Financial manager's role
Financial managers are often called controllers, treasurers, and financial officers in bigger organizations. Traditionally, the financial manager's role was that of a steward, being mainly involved in managing financial accounting, reporting, and cost controlling. The manager was also responsible to ensure proper policies compliance. With the increasing complexity and competitiveness of the business environment, the key role of financial managers today is to maximize shareholder's value, and financial managers are required to take on more proactive roles of leadership and consultation in nature (Catanach, 1999). New emerging roles
Financial mangers often act as information managers. It is important that they participate actively in assisting other executive managers in the strategic planning process by identifying all potential risks, establishing objectives, and allocating proper resources for the process. Financial managers also need to properly and effectively communicate the company's financial objectives between different programs and also continuously monitor their progress. Lastly, they are also responsible for preparing and disseminating all the necessary reports to different users and for educating users in...
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Bozzo, Nicholas L. (Nov/Dec 1998). Enhancing shareholder value through risk management. TMA Journal, 18(6), 4. Retrieved June 12, 2005 from ProQuest database.
Catanach, Anthony H Jr. (Spring, 1999). The changing bank controller: From steward to financial manager. Bank Accounting & Finance, 12(3), 65. Retrieved on June 12, 2005 from ProQuest database.
George, Bill (2003). Managing stakeholders vs. responding to shareholders. Strategy & Leadership, 31(6), 36. Retrieved June 12, 2005 from ProQuest database.
University of Phoenix (June 2005). Week Two – Working capital and short-term financing strategies. Retrieved June 12, 2005, from University of Phoenix, Resources, FIN/554 – Finance for Managerial Decision Making.
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