The role of the modern board is very challenging. Not only have boards come under greater scrutiny following the global financial crisis but they are faced with greater complexity and uncertainty. For example, the disruptive impacts of the digital world and new technologies are upending business models and generating significant turbulence. Board conversations now need to focus on the long-term resilience of the business as well as the importance of building trust and guarding reputation.
How can the CFO contribute to the effectiveness of these all-important conversations and board-level decision making? To explore this, we convened a panel, comprising Sir Charlie Mayfield, executive chairman of the John Lewis Partnership (one of the UK’s most successful retailers), and Jean-Marc Huët, CFO of Unilever, alongside the Chartered Institute of Management Accountants (CIMA)’s president, Keith Luck, and CEO, Charles Tilley. These different perspectives provided some interesting insights.
The panel identified four key tasks for the CFO:
- Financial security.
- The bills clearly need to be paid, but the panel had no doubt that CFOs need to understand what is driving the business, both in the short and long term to be truly on top of the numbers.
- Effective compliance and control
- Help the business navigate change and advise on strategic direction
- Build the capability of the finance function
How can the CFO help the board make best use of its limited time? Careful planning was identified as crucial in terms of giving priority to strategic discussions as well as thinking carefully about what the board needs in terms of information. In particular, a 40-slide presentation might not be the best approach! It might be better to make strategic use of “pre-reads” and concentrate on facilitating a meaningful discussion. Technology was also mentioned as a useful enabler in terms of bringing people together and keeping communications flowing.
You can read more in the short briefing paper, The Role of the CFO on the Modern Board.
How do you think CFOs can help boards be more effective? Do you agree with our panel?
