The Role of the Finance Partner in Dispute Resolution within your business
Finance Partners
The traditional role of the accountant covered duties such as reporting, reconciliations, accounting support, tax reporting and Companies House compliance but now the support of your financial leader can go so much deeper.
At MAP we have extended the traditional role to be much more ingrained and relevant in the business and although we use financial data, we help bring the numbers to life through Finance Partnering.
We link insightful data to help you make clear commercial decisions, and drive the goals and ambitions across all areas of the company, while building strong relationships with your team.
As Finance Partner, we are seen as a ‘trusted adviser’ where we support our clients in decisions covering the finances as well as structural and operational. That trusted adviser status means the Finance Partner will also very often be the first port of call when difficulty arises and boardroom or shareholder friction develops into something more.
Business disputes
As with any close relationship, disputes in your business can be complicated and multi-faceted. This can all too easily create a complex situation where relationships with the various stakeholders must be juggled. For the Finance Partner this is often against the backdrop of a longstanding rapport with key stakeholders whilst carefully observing the professional duty to the business entity.
A mature Finance Partner has the skills and experience to tread a very careful line between the disputing parties, whilst maintaining the professional client relationship.
A traditional accountant may recommend bringing in independent legal advice in the first instant of dispute which if not considered carefully has the potential to worsen the situation. This can add further damage to the parties’ relationships as well as the considerable costs in legal fees.
There are of course times when legal disputes call for specialist expertise. But working with a strong Finance Partner who can help you tackle any disagreements before they have time to develop, can save a lot of time and energy, and help keep focus on your business goals while recognising the right time to bring in the extra support.
How we can support in dispute resolution
Internal business disputes are always better tackled in the early days before they are allowed to fester. Your Finance Partner can add significant value here and their unique position can be used for the common good of all the stakeholders.
There have been times when I have felt like a relationship councillor more than an accountant, but being the impartial voice of reason who cares about the business as well as individuals in it, can help everyone separate facts from emotion.
Neutrality
If the outcome is one in the best interests of all, then neutrality and impartiality are crucial. We would not be drawn to give a view on behaviours, or an opinion on which shareholder’s view is “right”, as this may indeed have been the source of the conflict in the first place. Maintaining neutrality allows the Finance Partner to maintain credibility with all parties.
Communication
The majority of shareholder disputes tend to be born from poor communication. One shareholder might be disgruntled by the actions of the other, but in ‘the interest of the business’ rather than address the concern, it is ignored in the hope that ‘it might just go away’ – sadly, it seldom does. Minor issues will often develop over time, so that when they are eventually tackled, they have become significant obstacles, perhaps incapable of amicable resolution.
The Finance Partner often has an oversight of the issues at hand, and can provide a forum or communication channel. Encouraging early discussion between stakeholders when friction arises can often be key.
The situation may feel unique to those involved, but an experienced Finance Partner has helped deal with these types of disputes in the past and can manage any awkward conversations that need to take place.
Solutions
A Finance Partner will not only encourage the parties to engage in dialogue, but with the intimate knowledge of that business, they are also uniquely placed to recommend potential solutions and add accountability to any agreed actions moving forward.
Knowing when to stop and where everyone might be better served by an independent party stepping in matters. As your Finance Partner we recognise times where an external expert is the best person to support you such as breach of shareholders agreements, potential litigation, or any loss of confidence by one or more of the parties. Be that referring the parties out to separate legal teams or to be handled by intervention by a single lawyer/mediator.
Here we can brief a chosen lawyer so they maintain an independent instruction before they will have full and frank conversations with the key stakeholders in the company/dispute and their role is to identify the legal issues. They will work with the Finance Partner and where appropriate the stakeholders, again seeking to offer solutions, rather than simply trying to mediate away the difficulties between the parties.
Maintaining an independent approach can work particularly well because the disputed parties are not with their ‘team’ lawyers who see the other as simply as an adversary over whom to win the argument, but instead have a common goal and able to look objectively at the difficulties between them intent of finding an amicable solution, and not just a ‘win’
The involvement of the Finance Partner alongside the legal input can often lead to innovative, constructive, capital, cash and tax efficient solutions which simply could not have been achieved using more traditional dispute approaches.
The value that the right Finance Partner can bring to the resolution process should not be underestimated.
MAP has a team of experienced Finance Partners, and if you feel the need to discuss your issues or concerns with one of us, then don’t hesitate to call on 0161 711 0810.
