CFOs who are out of sync with their board of directors do shareholders -- and their calling -- a big ill service, especially when concern challenges stemming from a recession unfold. Now is a good time for chief finance executives to take a hard look at what their boards need from them and how well they're delivering to meet those needs.
A new study from McKinsey offers the model for such an appraisal. It shows that boards want to spend more time and attending on endowment management and forward-looking business scheme that maximize shareholder value and devote less time to dealing with conformity issues.
Over half of study respondents say that they would like to addition the amount of time spent at meetings on strategizing, development, analysis, and prioritizing of scheme that maximize shareholder value. And over half of them say they would like to addition the importance of sequence planning and of development the top team's leadership -- which should be good news for ambitious finance executive director.
But directors also say that they lack the cognition and expertness that could enable them to up their part to long-term strategy. Part of the ground for such restriction, survey respondents say, is due to lack of substantive interaction with direction. Directors that have a strong influence on creating shareholder value spend substantial time analyzing leading index to predict future public presentation, have entree to many degree of managers, and engage with direction in argument about long-term strategy.
What kind of forward-looking issues resonate with directors? Forty-one percentage of the respondents say they want to addition the importance of ensuring that company resources are in place to execute strategy; far fewer want to elevate the importance of adjusting strategy based on changing conditions.
In respect to administration and conformity, directors want to place more emphasis on ensuring clear communication with investors. They also want to focus more on future, rather than current, performance (half of respondents say they want to increase the importance of analyzing leading indicators and decrease the importance of financial metrics on current performance).
CFOs who want to strengthen their role with the board -- and maybe rise to the CEO position if such opportunity comes along -- would be smart to think about how their company's directors would address these survey issues.