During a crisis, having good dynamics between boards of directors and management teams is important for an organization to be able to recover successfully.
When the board of directors and the senior management are on the same page, making critical business decisions can be done efficiently, especially if there are well-structured, transparent, and fact-based process by which they can agree on strategic plans.
When your organization experiences monumental shifts in your business direction due to unforeseen contingencies, such as what happened during the outbreak of the Coronavirus pandemic, the chief financial officer’s (CFO) technical and financial expertise are crucial elements in the boardroom.
In this regard, the CFO can be a good resource who can help the executive suite forge a path forward in a manner that will be approved by the board. With their role in strengthening risk management and mitigation efforts, boosting financial planning and analysis, and preparing for any contingencies, the CFO is an indispensable talent during a crisis.
How the CFO Can Help the Board Succeed
The CFO can add a tremendous amount of value to the board’s decision-making process, as they are in the best position to provide a clear picture of the company’s financial standing at any given time. Armed with accurate and up-to-date figures, the CFO can help the board cut through the noise and focus on developing strategic positions that can be most advantageous to the business.
In the case of the Coronavirus crisis, the board has to have a clear understanding of the trends in their industry, as well as in the business’ performance.
In an interview with McKinsey, Rick Haythornthwaite of MIT Sloan School of Management advised that CFOs will have to provide board members with the information on what’s happening to the top line; that is, how the business is doing, what measures are being taken to preserve and boost cash, and whatever actions have been taken at the early stages of the crisis.
The CFO can also utilize any historical data that they have collected in the last three months to construct scenarios for the benefit of the board. In addition, the CFO has to provide high-quality data on market conditions to inform the board’s decision-making process and to facilitate board room conversations that are grounded in hard numbers.
Get the Support Your CFO Deserves
Now more than ever, your CFO needs reliable, continuous support from finance and accounting professionals to help them fulfill their responsibilities to the board and the C-suite.
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