Conflicts between treasurers and finance directors
Thursday, 19 September 2019
Welcome to month nine of our publication, Using Conflict as a Catalyst for Change – A Guide for Embracing, Managing and Mitigating Conflict Within Your Charity. This month we focus on conflicts between treasurers and finance directors or equivalent.
The relationship between the key board member responsible for finance (Honorary Treasurer, Chair of Finance or Audit Committee) and the finance director or equivalent 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’s the latter that most often creates difficulties in the charity.
Conflict in this relationship can be very harmful for charities. It could be that individuals don’t interact well, either with each other or with others in the charity, or that the relationship is ineffective or even disruptive.
Making the relationship count
To avoid conflict within the charity and to enable the relationship to make a positive contribution there are practical points useful to consider:
- Personal working relationship.
Good chemistry, respect, trust and the ability to communicate well between the individuals is extremely important. The treasurer should be a useful sounding board for the finance director. However, this is a working relationship and shouldn’t become too cosy. A fixed-term appointment for a treasurer can help prevent this.
The treasurer and finance director shouldn’t be afraid to challenge each other when necessary and remain objective so that proposals are reviewed thoroughly before decisions are made.
- Avoid operating in isolation.
Together, the treasurer and finance director can make sure that the board is engaged in the charity’s finances. They can prevent decision-making paralysis on financial matters and establish a shared financial vision for the charity. The relationship provides the link between the board and the executive team on finance matters.
- Necessary skills balance.
The skill set for each role is similar but not identical, with the treasurer taking a more strategic role. Make sure each party has the skills their role requires. Without this there’s likely to be a lack of trust and frustration between the parties.
- Keep in touch.
Agree communication channels and timing. Also agree how financial matters will be reported to the rest of the board. Having clearly defined roles so that everyone knows what’s expected of them and are aware of the chain of command can aid effective communication and help to prevent conflict within the charity.
We explore the relationship between the treasurer and finance director in more detail in the full article, which you can read here.
Next month we’ll be focusing on conflicts between being transparent and your charity’s reputation.