As an organization built “by CFOs and for CFOs”, we feel that our most valuable resources are our members and partners. And, with an eclectic representation from a variety of industries and backgrounds, our knowledge base is vast, allowing us to focus on our mission to “empower CFOs”. Adhering to this goal, we always offer new perspectives and first hand expert advice to you, directly from our sponsors, allowing you to access the best possible resources.
Take a look at our latest “thought piece” provided by Tatum, one of our renowned partners. A part of Randstad USA, this company offers a broad range of finance and accounting staffing services and solutions, all aimed at resolving the challenges facing the C-Suite. This month’s article focuses on developing effective relationships with boards of directors.
Members of the C-suite are well aware of the importance of developing a solid, effective working relationship with their boards of directors. However, achieving that can prove difficult for many organizations. The reality is that boards are effective when they are comprised of a wide range of professionals, bringing with them varying backgrounds, needs, and agendas. Yet, this is one reason why achieving a healthy relationship with the board can be challenging.
Due to global economic health concerns, political unease, and internal worries, such as loss of key executive talent and poor execution of strategy, boards have a long list of concerns. So, how can the C-suite improve board relationships? Here are three best practices to facilitate optimal board and C-suite relations:
Ease Risk Management Concerns
Over the last 5-10 years, CFOs have greatly increased their focus on risk management. However, often there is a misconception among boards as to just how much or how little CFOs are spending on risk management, or they have lack of clarity as to specific risk oversight strategies. CFOs can alleviate these challenges with the following advice:
- Risks and mitigation plans should be reviewed in connection with the organization’s business strategy and objectives. Considering your risk strategies without doing so will result in too narrow of a view.
- Be transparent and clear as to risk priorities when reviewing with the board. Utilize a visual depiction of which risks have moved to become higher priorities or lower priorities in order to help the board assess the current situation.
It’s All In The Delivery
One of the biggest complaints from boards is information overload, particularly when it comes to complex or confusing issues. C-suite executives often make the mistake of assuming members of the board are more knowledgeable about issues than they may be. All board members are not created equal and most have expertise within a number of areas, but not all. In addition, C-suite executives must balance the need to be transparent, while avoiding derailing progress with off-strategy information or simply too much of it. Take into consideration these key points:
- Simplify your communications by keeping reports and other documents focused on the lowest common denominator of understanding, and relevant to business priorities. As such, you will connect with all levels of the board. However, be prepared to offer additional details if needed.
- Start at the beginning at every meeting. Often, the intensity of C-suite roles can cause executives to overlook the fact that board meetings are episodic, leaving many members challenged to retain information from one quarter to the next. Clearly, a lot can happen in a quarter, so it’s critical, at the onset of every board meeting, to refresh key issues and how they may have changed.
Board Members Are People Too
It may sound juvenile, but many C-suite executives don’t take the time to view their board members as individuals, or neglect the same fundamentals that apply to any personal relationship. Trust and transparency are reinforced through personal, one-on-one relationships. Understanding board members’ diversity of individual styles affords leaders greater insight into key preferences, such as which members prefer details versus big picture, data versus personal insight, and email communication versus phone. Here are some considerations:
- Make the investment of time and commitment more balanced by visiting board members in their environment at least once or twice a year. This not only demonstrates that the relationship isn’t a one-way street, but also provides for furthering personal relationships.
- Never undermine a board member, no matter the nature of the question. Very often, C-suite executives overcompensate in trying to appear knowledgeable or “on top of it” by answering questions as quickly as they can or by subconsciously making a board member look unwise. Instead, make sure to reply to questions in a manner that affirms the board member asked a relevant and important question.
- Avoid working “under the radar” or around the board, as doing so can cost leaders in big ways down the road. Many C-suite executives, on purpose or otherwise, will only provide a fraction of the information when addressing a significant issue, rather than the whole truth. Trust will be eliminated and may ultimately end your position. The best practice is to always come clean and do so immediately.
For more information on how to elevate relationships with your board of directors, stay tuned for details on Tatum’s upcoming Audible Insights for CFOs on the Go, as Chief Financial Officer Cindie Jamison dives deeper into relationship building and discusses how to make an impact with your board of directors.