Jean Furter, Brocade’s vice president and treasurer began by noting that treasurers don’t have time to waste during formal board meetings. “Your timeslot could be quite tight,” he said. “So a key item for us around board engagement is to really try to make communication as effective as possible. Because at the end of the day, what we want to hear is, ‘Yes. We approve.’ If you don’t get there, it means there’s a problem and it impacts timing on implementing projects.”
Furter and the other executives offered seven key best practices treasury and finance professionals can apply to communicate more effectively with the board.
Make your presentation for the board, not yourself. Financial professionals need to make sure they get their points across to the board in their presentations. “Avoid slides that no one understands,” Furter said. “You achieve nothing; you waste time.”
Leverage the knowledge of the board members. The board members have certain experience in the corporate world, and Furter recommends that treasurers do what they can to leverage that experience and learn from it. “This way, it’s not just presenting, answering questions and getting the project approved,” he said. “You’re trying to really get feedback from these board members.”
Create a mentoring relationship. Building on the previous point, Further recommends actually establishing a mentoring relationship between a board member and yourself. This allows a financial professional to not only get to know the board member better and be able to work closer with them, but also help them to benefit from the board member’s expertise.
Document who each board member is, individually. Once treasury and finance professionals get to know who their board members are, they often will need to take past history into consideration when presenting to them. This may require you to put in some extra work to reach certain people. “If you have someone who has experienced a liquidity crisis at a previous company and you are showing them a plan that will be more aggressive on liquidity, that person will need to be presold,” Furter said. “Their experience is very important, because it’s going to dictate their approach.”
Understand that, for the most part, board members are visitors. Alan Earhart, a Brocade board member and chair of the audit committee for NetApp, explained the importance of understanding the board’s point of view. “A board member visits the company, you live at the company,” he said. “So we don’t walk in with the knowledge that you have, and it’s very difficult for us to just jump in. So we’re going to have questions. If there’s something you want, you need to talk to us, and have one-on-ones.”
Create a formal board relationship plan. Furter noted that many treasury functions have relationship plans with banks, with scheduled meetings, regular reviews, etc. He recommends establishing similar plans with board members, “Ensure that you meet with them once a year to find out what some of the issues and concerns are actually document that—have a formal, written, relationship plan,” he said.
Know what you want to achieve in your presentation. Different goals require different types of presentations, noted Dan Fairfax, senior vice president and CFO for Brocade. “Are you telling or are you asking? Don’t mix those things up,” he said. “You’re going to have several things that you’re presenting, and you either ask or tell. The presentations have to be different.”
Ultimately, engaging the board isn’t rocket science as long as you put in the effort. Treasury and finance professionals need to know their audience and tailor their presentations accordingly. And that lesson can be applied to other important stakeholders, as well. “There is no finance topic that is so complex that you can’t simplify so that almost anyone can understand,” Furter said.