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In a typical large company, a ‘them and us’ mentality between head office and the rest of the organisation is almost always prevalent.

The belief among the ‘troops’ of the individual business units is firmly convinced that without the constant interference of HQ - or, as it can be more accurately described, the ‘corporate centre’ - they would be free to run their own affairs, get on with framing their own destiny and succeed untrammelled by bureaucracy.

Non-strategic grind

For the finance function, this is generally not good news. The finance function usually forms the heart of the corporate centre – indeed, it is the only aspect of the corporate centre (other than the governance and reporting obligations for a quoted company) which cannot be disputed or dispensed with.

Rather than concentrating on strategic activities which will add value to the business, however, too many finance functions get dragged into the day-to-day, non-strategic grind of checking numbers and reporting – which in turn reinforces the perception that finance is there simply to ‘interfere’ in the affairs of the business units.

Furthermore, finance’s indispensable status within the corporate centre is both a blessing and a curse.

Precisely because cinance enjoys a unique status, setting it apart from its sister functions - strategy, IT, HR, legal, and so on - it is often the area of the corporate centre which is least scrutinised.

In the medium to long-term, this is not a desirable situation, either for the finance function or the wider business itself. Over time, a finance department which is not regularly assessed for suitability will become flabby and bureaucratic.

Team at breaking point

Maxxim Consulting runs a regular benchmarking study, which analyses the corporate centres of FTSE and major private companies.

Given the importance of the finance function it is often the focus of a review but the area where we have had to tread most carefully, especially when it comes to talking about the number of finance people needed.

This comes as no surprise since we found the most common complaint of finance directors and financial controllers is that they cannot keep pace with the workload and that their team is at breaking point.

There is usually more than an element of truth in the finance team’s assertions at most of the companies we have benchmarked. Producing the interim and end of year results in itself is usually a full on activity.

On top of this we also found that 68 per cent of our benchmark group were either involved in acquisitions or disposals and were doing this alongside their regular reporting activities.

Lack of clarity over the real role

What did come as a surprise was the absence of the usual suspects – lack of common finance systems, insufficient automation and unclear processes.

Instead our findings showed it was much more to do with rigid structures and the wrong type of behaviours.

The overarching theme of our research is that there is often a lack of clarity over the real role, purpose and strategic requirements of the corporate centre – and this inevitably affects finance, and its own role and purpose.

Firstly, let’s look at how this affects structure. Not a single company had put a more dynamic approach in place to deal with acquisitions, disposals and JVs – an unpredictable and variable workload.

Indeed, more than 90 per cent of corporate finance is still structured in the traditional silos, with up to six layers between the Group FD and financial analysts / assistants.

This is not a structure which easily lends itself to the ever-changing, strategic demands of M&A activity.

Finance teams operate in narrow roles whereby the need in the centre is for higher calibre resources that work in units that can take on a broader range of activities and projects as well fulfil the core activities required of a finance function.