Sometimes, I harbor a suspicion that Dante was a Financial Director. His famous paintings, “The Inferno”, is such an accurate description of the job that it can’t be in any other case. He is fervently hated by using the people. He is very well despised by means of the opposite managers (“imply bastard” is his commonplace nickname among them, more often than not for scrutinizing their fee debts). He is dreaded via the owners of the firm because the powers that he has regularly outweigh theirs. Shareholders hold him responsible in annual meetings. When the monetary effects are properly – they are attributed to the talented General Manager. When they are awful – the Financial Director gets blamed for not imposing budgetary discipline. It is a no-win, thankless job. Very few make it to the top and the relaxation retire, eroded and embittered.
In Macedonia this will be considered treason – but, inside the West, every characteristic holder inside the business enterprise can – and regularly is – summoned by the (active) Board. A grilling session then ensues: debriefing the officer and looking to spot contradictions among his testimony and others. The shape of business corporations within the USA displays the political structure. The Board of Directors resembles Congress, the Management is the Executive Arm (President and Administration), the shareholders are the human beings. The standard exams and balances are applied: the government is supposedly separated and the Board criticizes the Management.
The identical processes are carried out: the Board can summon a worker to testify – the identical way that the Senate holds hearings and move-questions people inside the administration. Lately, however, the delineation became fuzzier with managers serving at the Board or, worse, colluding with it. Ironically, Europe, in which such incestuous practices have been not unusual hitherto – is reforming itself with zeal (see Britain and Germany).
Macedonia is still after the comfortable, very vintage European version: Boards of Directors are rubber stamps, devoid of any will to exercise their powers. They are staffed with cronies and pals and circle of relatives contributors to the senior control and they do and decide what the General Managers inform them to do and to decide. General Managers – unchecked and unbalanced – get themselves worried in huge mistakes (not to say worse matters). The idea of company governance is alien to maximum Macedonian companies and the organizations are regarded by way of most wellknown managers as milking cows – speedy paths to private enrichment.
(1) To regulate, supervise and enforce a timely, complete and correct set of accounting books of the company reflecting all its activities in a manner commensurate with the relevant law and regulation inside the territories of operations of the company and with internal hints set on occasion by way of the Board of Directors of the company.
This is relatively hard in Macedonia. The books do not mirror truth due to the fact they are “tax pushed” (i.E., meant to cheat the tax government out of tax sales). Two units of books are maintained: the real ones which incorporate all the income – and another one which is provided to the tax government. This gives the CFO an inordinate power. First, he is in a position to blackmail the control and the shareholders of the company. Secondly, he becomes the facts junction of the company, the handiest one who has the complete photograph. If he is cheating, he can without problems enhance himself. But he can’t be sincere: he has to continuously lie and he does so as an existence lengthy dependancy. He (or she) broaden a cognitive dissonance: I am honest with my superiors – I only misinform the State.
(2) To enforce continuous economic audit and manipulate structures to reveal the overall performance of the firm, its waft of funds, the adherence to the finances, the fees, the earnings, the price of sales and different budgetary objects.
In Macedonia, that is regularly harassed with significant planning. Financial manipulate does no longer imply the waste of treasured management resources on verifying petty charges. Nor does it mean a budget which is going to such information as what number of tea luggage may be fed on by using whom and wherein. Managers in Macedonia are nonetheless under the sensation that they are supervised and observed, that they have got quotas to finish, that they have got to act as although they’re running (although they’re, in truth, maximum of the time, idle). So, they interact inside the vintage time primary planning and that they do it via the finances. This is inaccurate.
Finance in a firm is not any exceptional than the price range of the State. It has exactly the equal capabilities. It is a declaration of coverage, a beacon showing the way to a higher (=greater profitable destiny). It set the strategic (and no longer the tactical) desires of the firm: new merchandise to increase, new markets to penetrate, new management techniques to put in force, viable collaborations, the identity of the competition, of the relative aggressive blessings. Above all, finances need to allocate the scarce sources of the company in order to reap the most impact (=efficiently). All this, alas, is missing from budgets of firms in Macedonia (that I actually have visible).
But the price range is only an amalgamation of the intentions. No less vital are the manage and audit mechanisms which go together with it. The audit will be outside but ought to be complemented with the aid of inner strategies. It is the task of the CFO to offer the control with an actual time tool on the way to tell them what is occurring in the company and where are the problematic, capability inflammatory areas of interest and performance.
(3) To well timed, regularly and duly prepare and gift to the Board of Directors economic statements and reports as required by all pertinent laws and policies within the territories of the operations of the company and as deemed essential and demanded from time to time by way of the Board of Directors of the Firm.
The caution signs and symptoms and barbed twine which separate the diverse organs of the Western company (control from the Board of Directors and each from the shareholders) – have yet to attain Macedonia. As I said: the Board is complete with the cronies of the management. In many businesses, the General Manager uses the Board as a manner to at ease the loyalty of his cronies, buddies and family members through paying them hefty costs for their participation (and presumed contribution) in the meetings of the Board. The poor CFO is dependable to the management – not to the company. The company is nothing but a car for self-enrichment and does no longer exist in the Western experience, as a separate functional entity which needs the undivided loyalty of its officials. A susceptible CFO will become a pawn inside the get-wealthy-short schemes – a stronger one will become an accomplice in them. In both instances, he will be pressured to collaborate, sometimes, with things which war together with his sense of right and wrong.