Being able to communicate financial risks and needs effectively to the board of directors is a key role for senior financial executives. These communication skills and practices, outlined in this Wall Street Journal article, help CFOs interact and develop a healthy relationship with board members.
The advice – given by experts and partners at Deloitte – includes these five pointers:
1. Keep it minimal
Presentations to the board are a crucial moment when the CFO has a chance to really get her or his message across. Thorough preparation is a given but prioritise only the essential information, and present the key message clearly. The article states: “Understand what board members really need to know. As a simple research initiative, read the charters of all the board committees, as well as the charter of the board itself. That can often provide a sound road map in terms of the minimum information required.”
Any information sent to board members before a meeting or presentation should also be concise but comprehensive. CFOs should assume material sent out beforehand will be read, so it's important not to duplicate presentation information in pre-reads. Deloitte's Sandy Cockrell III said: “Assume that board members will read everything that’s sent to them, and present information clearly, concisely, and confidently.”
3. Time management
Presentations should last no longer than scheduled and time should be factored in for questions and discussion, without running past the allotted time. Deloitte's Charles Holley notes: “Don’t be that person who always takes 30 minutes to cover a presentation that was scheduled for 20 minutes... If you do that, a CFO’s credibility with the board could suffer greatly.” Also provide a brief summary of the previous meeting to provide context for the day's discussion.
4. Meet outside meetings
Planned board meetings are all well and good but, according to Deloitte, it's becoming common practice to seek opportunities to speak to board members informally, for example by arranging an office/on-site visit or a work dinner to engage them personally in some of the key financial issues. These informal meetings are also opportunities to introduce other members of the financial team to the board and enable other financial executives or managers to take a lead in communicating on certain areas such as audit.
5. Get board experience
Lastly, a seat of one's own at the boardroom table may something that some CFOs strive for. Deloitte's advice is to position yourself by getting experience outside the company first on the board of a non-profit group. Enlist the help and support of the CEO in finding such an opportunity. Deloitte's Cockrell adds: “It’s sometimes said that serving on a board is more valuable than getting an MBA. In fact, a number of CFOs say that serving on a board is one of the most important things that they’ve done for their career.”
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