Chief Financial Officers hold an integral position within an organisation’s most senior ranks but communication breakdowns can put their relationship with the Board at serious risk.
William Buck South Australia Managing Director Jamie McKeough says that CFOs who lack confidence or effective communication skills are doing themselves and their Boards a major disservice.
“In my experience with Boards, CFOs can often feel they are somewhat on the outer so they hold back on offering their opinions in meetings,” Mr McKeough said.
“But this is a mistake.
“An honest, open and respectful relationship between the CFO and the Board is critical to the success of any organisation.”
Mr McKeough said that some CFOs underestimate their importance and influence within an organisation, however by the nature of the position, a CFO usually possesses a unique understanding of the business and particularly the risks present.
“CFOs have incredibly important information at their disposal and this needs to be communicated effectively and clearly to members of a Board. Otherwise opportunities and challenges will go unnoticed and problems left to fester,” he said.
“It’s a different perspective to the CEO and one Board members are eager to hear.
“Problems often arise in how that valued perspective is communicated, particularly to directors that are not from high level finance backgrounds.
“A CFO role is not for a shrinking violet but instead someone prepared to speak up.”
Mr McKeough said there was a number of ways that a CFO could build an effective and positive relationship with a Board, particularly via efficient information delivery.
“Information overload is a communication killer at Board level,” he said.
“It’s absolutely vital that CFOs keep information brief.
“Presenting critical information embedded within documents stretching over 100 pages is a sure bet to lose an audience.
“That said, when putting up proposals it’s still important to be complete as any half-baked ideas will be quickly dismissed by a Board.”
Ultimately CFOs need to be clear on what decision they are asking of a Board and give options if possible.
“Don’t ask Boards to make leaps of faith but take them on the journey,” he said.
As well as leading the 160-strong South Australian office of accounting and advisory firm William Buck for 12 years, Jamie McKeough has served on numerous Boards and Advisory Boards for organisations including William Buck International, Osmoflo, Redarc Electronics, large family groups, emerging businesses and not-for-profits.
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Jamie can be contacted on jamie.mckeough@williambuck.com
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