Confidential report of finance director S.hart
This report aims to assess the performance of S.Hart, Finance Director, during the year 1999. In particular, it aims to review his actions and decisions in the following areas:
- General financial control
- Budgetary control
- Staff relations
S.Hart was appointed Financial Director in January 1999. He had previously been Chief Account in the company.
For the first three months in his new position Mr.Hart worked alongside Mr.Gwent, his predecessor. At his first General Management Meeting, he was asked how he saw his role in the company. He replied that he thought his primary responsibility was to exert tight financial control particularly on “running costs”.
In April 1999, he submitted a first quarter financial report which already showed a slight decrease in current costs. At this meeting, the Marketing Director commented that the Spring advertising campaign had been delayed by the Finance Department’s slowness in approving the expenditure.
In June 1999, two junior members of the Finance Department resigned and went to work for one of our competitors.
The second quarter financial report showed costs running considerably below forecast. The Marketing Director complained at the Meeting that his advertising budget had again been restricted. The problem was in getting funds from the Finance Department.
In the following month, F.Flynn, the Finance Director’s assistant, asked to be moved to another department. He said he could not work any longer with Mr.Hart.
In October, Mr.Hart presented his 1999 budget. This was based on pessimistic forecasts for sales, and a planned 18% reduction in running costs. The third quarter financial report had shown a marked drop in income matched by an even sharper drop in costs.
In November 1999, the Marketing Director resigned saying: “If he stays, I go.” It was understood that he was speaking about the Finance Director. Final figures for the year showed a good level of profitability (slightly higher than expected) but an alarming downward trend in sales.