Managing conflicts between Treasurers and Finance Directors
The importance of avoiding conflict
The relationship between key board members responsible for finance (Honorary Treasurer, Chair of Finance or Audit Committee) and the Chief Financial Officer (CFO) or equivalent (Finance Director, Resources Director or Head of Finance) is crucial for the success of a charity. Existing guidance tends to focus on technical and accounting matters, rather than governance roles and “soft” issues. Yet it is the latter that most often creates difficulties.
Conflict in this relationship can be very harmful to charities. Whether it is individuals that do not interact well, either with each other or with others in the organisation, or where the relationship is ineffective or even disruptive.
There are no legal or regulatory provisions that determine how this relationship should work, and virtually no guidance on how it can be done well. Without proper planning and a structured approach, these relationships can be dysfunctional, or at worst disastrous for charitable success.
Making the relationship count
Clearly, roles and relationships vary according to the size and complexity of the organisation, and it is not unusual for the treasurer to have a more hands-on executive role in smaller charities. This article considers the position where there is a professionally qualified or experienced CFO and a non-executive Treasurer, which enables a clear differentiation between management and governance roles.
To avoid conflict and enable these relationships to make a positive contribution, there are six key practical characteristics which will be useful to consider:
- A successful, personal working relationship
- Avoiding Finance operating in isolation
- Recruitment considerations
- Board representation
- Staying in touch
- Balance of skills