Veteran board members share secrets for excelling in the CFO role and making a lasting mark on your company and your career.
To survive in the C-suite, CFOs can’t just run in the accounting lane anymore. In recent years, technology, digitization, and big data have markedly transformed the CFO role. As a McKinsey partner noted in 2019, “CFOs of the future have to flex different muscles.” COVID-19 accelerated that trend, and today’s current and aspiring CFOs must embrace this seismic shift in order to succeed.
To help our CFO community understand this shift from the board perspective, we interviewed three C-suite veterans who currently sit on 11 boards collectively. They’ve also served as CEOs, COOs, and CFOs and served on 27 other boards for public, private, and nonprofit entities. If you want help landing your CFO dream job, thriving in that role, and ultimately earning your own board seat, heed the advice of these experienced corporate leaders.
Go Beyond the Numbers
A good CFO used to be a numbers person. Now, the best CFOs are storytellers, according to Richard Rodgers, president of Fluent Investments. A current board member of five healthcare firms, he says the CFO is the key business ambassador. Not only do CFOs need to calculate and analyze the numbers, they also need to develop and present a convincing and compelling business narrative to board members and to existing and potential investors, whether private or public.
All three board members indicate that they start looking for storytelling skills during the CFO search process. Your willingness and ability to discuss your career missteps alongside your achievements gives the board a preview of how transparently and contextually you’re able to communicate positive and negative information.
Moreover, today’s most informative business storytelling hinges on big data as its primary source. As an experienced technology executive, strategic business advisor, and current member on three public and two private boards, Gayle Crowell says that CFOs need to embrace AI-powered tools, which provide the data that allows them to:
- Identify the real-time business situation for the board at any time
- Proactively and intelligently translate for the board what the numbers mean
- Present preemptive strategies for balancing the risk/reward equation of decisions
Today’s boards have little use for CFOs who just report the numbers, focus on the rearview, or fail to anticipate the what if’s that board members inevitably ask.
Build Up the Team
Board members also prioritize demonstrable teamwork skills during and after the CFO search. Finance and operations expert Larry Hagenbuch, who currently sits on three boards, says the number one thing he looks for in a potential CFO is fit. He probes to see if the candidate can become an integral member of the team by meshing with the CEO and everyone else.
For Hagenbuch, three questions determine whether a CFO is a true team player:
Have you worked repeatedly with the same people throughout your career?
Have you mentored and been mentored?
Are you comfortable crediting others?
The other two board members agree with this assessment. Rodgers says that “It’s a clear red flag if the CFO candidate talks ‘me, me, me’ or beyond their actual accomplishments.” Once hired, he expects the CFO to build a solid team and continue to recognize the work of others.
Crowell notes that the events of 2020 stretched employees and organizations to their limits. Since both human resources and information technology report to them, CFOs now need to be prepared to lead the entire team—from the board down—in understanding and mitigating the risks that were exposed over the last year: a changing cultural landscape, remote workforce environments, over-stressed employees, growing cybersecurity threats, and the increasing need for business continuity planning.
Know the Business
CFOs also need to exhibit a thorough grasp of the business. Based on his experience as a former CFO and current investor and board member, Rodgers gauges a CFO’s knowledge using these board package elements:
- Accurate financials
- Correctly identified and calculated key performance indicators
- Distinction between one-time performance blips and long-term trends
- Overall focus on the most pressing matters requiring decisions
The CFO should understand the key levers that drive the business and be able to communicate them to the board, according to Crowell. Given the data now available to them, CFOs must always be prepared to explain what happens when any lever is moved. Furthermore, the ideal CFO doesn’t wait to be asked. Instead, they proactively present the opportunities and risks that new money, cost-cutting, or other changes would bring.
Both Crowell and Rodgers also point out that board members quickly recognize patterns and trends based on their experience. When you present the board package, they’re likely comparing your numbers against those of other companies they’ve led or are invested in. Crowell suggests that you can wow the board if you preempt such comparisons by proactively explaining any differences and showing where the business intends to make up that variance.
Run the Show
CFOs get a limited number of times per year to update the board and solicit their feedback. Don’t squander that time with poorly planned or badly run board meetings.
As a former U.S. naval officer, it’s not surprising that Hagenbuch stresses the need for structure and discipline at board meetings, something he says boards expect the CFO to provide. He also points out that when the CFO leads the meeting, it allows the CEO to act as the strategic advisor to the board, the ideal scenario.
Hagenbuch’s recipe for productive board meetings includes advance electronic copies of all documents plus these ingredients:
- Agendas, with a scheduled start, break, and end times, that focus on the most important matters
- Reviewed and adjusted minutes from the last meeting ready for approval at the present one
- Lists of all policies and plans up for approval at the meeting
- Board presentations in a standard format that draws attention where most needed
- Any in-meeting meals pre-ordered and delivered on time
- Separate time slots for audit committee meetings
- Board-member-only sessions at the end followed by their message to the CEO and CFO
Look Ahead to Your Future
Each board member offered distinct advice for reaching their level, but collectively they provide a roadmap for CFOs who aspire to become a denizen of the boardroom.
Rodgers says start thinking like a CEO or COO while you’re the CFO, and eventually take your turn running a business.
According to Hagenbuch, relationships are the key to your first board seat, which can be the hardest to land. He recommends regularly and genuinely investing in your network throughout your career in order to position yourself when opportunity knocks.
Finally, Crowell says know your value proposition specific to the board spot you seek. Don’t rely on the CFO title or regurgitation of your resume. Be ready to explain what you’ve done in the past that created value and how you could do the same for the company on whose board you hope to serve.
Ready to Flex Some New CFO Muscles?
What an exciting time to be a CFO. As Crowell puts it, you get to partner with the CEO, drive business strategy, and even reimagine business models. Let Focus Search Partners help you make your mark in this new era of CFO leadership and ingenuity. We build teams that grow companies, and together, we can create new opportunities for growth and advancement.
Meet our Contributors:
Gayle Crowell is a highly experienced Board Member and technology operating executive with extensive experience in operations, sales, marketing, and C-level management in both industry-leading software companies as well as venture and private equity backed technology and financial services companies.
Larry Hagenbuch is a finance and operations expert with more than two decades of profit and loss and turnaround experience. With an extensive background as a consultant and senior leader at various industrial and manufacturing businesses, he specializes in overseeing supply chain, operational, and financial performance improvements.
Richard Rodgers is an investor in and advisor to growth companies and private equity firms in the healthcare sector. He has a passion for building businesses and deep experience in the challenges growing companies face including capital formation, platform scalability, organizational design, mergers and acquisitions, and leadership. He currently serves on the boards of Behavioral Health Group, Family Allergy and Asthma, Functional Pathways, Newport Academy, and Vision Innovation Partners.