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Thursday, March 1, 2012

Shining for Your Board


Are you a value creator or a score keeper? Okay, maybe both, but CFOs have indicated through our annual benchmark study that they’d like to spend much more of their time creating value. They also indicated they’d like to make that value more visible to their Boards of Directors.

Whether you are CFO of a public or private for-profit business, or a nonprofit organization, you will be engaged with a governing body, most likely a Board of Directors. But being engaged, visible and valued by your Board is the trifecta CFOs say they are looking for.

If you're concerned that your Board perceives you as "someone just keeping score" or takes the great job you are doing for granted, there are steps you can take to change those perceptions notes Dean Quiambao, a senior manager in the auditing group for Armanino.

"I know many CFOs who contribute so much to their company's strategies and successes and those companies steadily crank out great, positive results every year despite poor economic conditions and other constraints and yet, their Boards tend to take them a little for granted."

That's because they have little with which to compare their CFOs performance, Dean continues. "Sometimes, it's good to inform directors on where you stand in the universe of financial decision makers," he continues. "The question is: how to communicate that to the Board in an appropriate manner."

Dean recommends finding third-party experts to verify the great work you do as CFO; individuals or organizations with sterling reputations and a grasp of the totality of the CFO contribution. For example, your professional services business partners such as business consultants, accountants, lawyers and bankers.

"Getting benchmarks and best practices for your industry is a good approach," Dean says. "It gives you the opportunity to compare your performance to that of your direct peers and competitors and then highlight your strengths."

This works with Boards of Directors because it gives them a clear sense of where they are in terms of their financial performance. Even more powerful, it provides a laser focus on strategic goals your company should consider to stay ahead or keep up with the competition."

If you're a little behind the curve, you can quickly pivot to improve your standing. For instance, think about where you are creating value and where you should be adding value. Can you, for example, produce instant key metrics or indicators? A good business intelligence or business discovery dashboard with mobile applications can be leveraged to wow your Board with up-to-the-second data that can then be instantaneously displayed on tablets. You can use these applications to react to questions in seconds and in real time; or to come up with ROI on specific activities and projects.

There's also the ultimate comparison device - industry benchmarking. And you don't have to do any of it yourself. Armanino’s CFO Evolution Annual Benchmarking Study shows hundreds of CFOs how they stack up against their peers and gives them a great sense of where they are performance wise.

In addition to free benchmarking, Dean recommends taking advantage of free education and content that is provided by many firms and by national and state accounting associations. At Armanino, CFOs can take advantage of free webinars at their desks while breaking for lunch. The firm's website continuously offers fresh content on issues in business strategy.

The point is to tap into all your network of professional associations and services partners' offerings. Remember that your business partners make it their business to be at the leading edge of best practices and can transmit those practices to you and your organization.

CFOs of mid-sized companies wear so many hats; from human resources and facilities to IT and legal; and their common complaint is the scarcity of time to stretch and think strategically. For the time-strapped CFO, Dean suggests selecting a promising controller or senior staffer and giving them the assignment to survey your vendors and ask them about their free offerings and what they think you could be doing better right now.

"This empowers your staff, gets you the information you need without constraining your time and can lead to some really positive discoveries about how to significantly improve your performance," Dean says. "These are some of the tools that CFOs can use to add significant value to their organizations and at the same time, differentiate them from their peers with a Board of Directors and senior management."

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