2015 News and Media

Industry votes in favour of Director qualifications

Industry experts have hailed the idea of a national qualification for Directors in the wake of last year's debate.

The feedback was unanimous to Bridging and Commercial's poll on whether or not there should be a national qualification for Directors, with 100 per cent of participants stating yes.

While commenting on the results, John Davies from Just Cash Flow is one who strongly agrees in the merit of a University led qualification for potential Directors.

“I have previously suggested it should cover a range of topics including finance, employer responsibilities, sales/marketing and planning,” said John.

“Just Cash Flow sees a lot of applicants that are totally on top of their business, KPIs and their future investment plans.

“However, too many don't appear to grasp the basic business fundamentals - alarm bells start to ring when someone doesn't know the difference between a cash flow forecast and a P&L. Those that don't inspire confidence are going to struggle to raise finance.”

John believes, as long as it's not too bureaucratic, he sees no negatives on having a national qualification, adding that this would in fact help the bridging market.

“Applicants would be more likely to secure the finance they need because they would be demonstrating a stronger understanding of their business and its financial needs,” he added.

“… before you start driving you study and take a test - surely it makes sense to do the same before starting up in business.”

Although, Head of Communications at Omni Capital, Bob Sturges, expressed concerns over the bureaucracy involved and the effect it could have on innovation.

“In my view, there is a danger of stifling much-needed entrepreneurship while adding further layers of bureaucracy at a time when private enterprise is already hugely burdened,” said Bob.

"Robust Company Law already exists on the statute books, and more is being added to ensure future miscreants are adequately punished for wilful neglect or misdeeds.

“The respected Institute of Directors (IoD) offers its members a Chartered Directors Programme. Featuring an examination that needs to be passed, it is a flexible programme designed to equip Directors of businesses of varying size with the skills and knowledge they need to discharge their duties and obligations effectively and properly. I would urge all company Directors to pursue it."

Head of Lending at Beaufort Capital Management, Steven Oliver, agrees with the results of the poll and believes the creation of a national qualification will help first time companies stay operational as they will know the legal side of the role.

“A qualification would teach about Company filings, requirements as regards Company Accounts and records which are noted within a Companies Memorandum and Articles of Association but often not read or understood by the Directors,” said Steven.

Managing Director of Total Money Management, Mo Chishti, agrees and isn't surprised to see these results as he believes it is important that any business is operated by qualified Directors. “It is important that any business whether a plumber or IFA, a Baker or Used Car Showroom are operated by qualified and regulated Directors with scrutiny of their professionalism," says Mo Chishti.

"I am not surprised to see this result and organisations that try and address this issue like IoD is not easy to access for all. New start-ups would not be stifled as the value of understanding business and its operation would be a benefit to industry not a hindrance."

Paul Wertheim of Mint Bridging also holds that the qualification would help new Directors understand the number of laws and legal obligations needed in that particular role.

“A qualification will ensure that directors have the skills to deal with the administrative burden so potentially easing the strain on business building role,” said Paul.

“Furthermore what and how we can lend is a changing sand bank. Again we need to learn from an early stage who, how much, when, and how we can lend.

“Certainly I believe regulation will be forced upon us and we need to be prepared to take on the further burdens that it will thrust onto the Directors.”

Date Issued Thursday 15 January 2015.

This article was originally published by B2B news portal Bridging & Commercial.

Follow @justcashflowuk on Twitter for more like this.

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