Most British workers have admitted that they tend to use their smartphones during meetings to visit Facebook, Twitter and other social media channels – even our Real FD Live panel joked that board meetings can be the least enjoyable part of the job, providing the opportunity to catch up with online shopping.
So on the subject of making the board tick, Brian Muirhead, director at Foxley Consulting, said: “A board is a team and like all teams there needs to be an effective team dynamic, and the boards that I’ve sat on have varied extensively. They’ve been most effective when all the people in the room are together for a common purpose, and where nobody takes a strong view that they should be dominant in the team. Environments where the board views itself as a committee that gets together to second-guess what the executive management is doing. I think that can be very negative.”
He added that the CEO and CFO, which are usually the executive management team, should look to work together and enter the meeting with a clear agenda and unified purpose of discussion and how they want it to move forward. “They use the expertise and resources of the other board members, and then those other board members deploy the expertise in a way that’s supportive of the management that doesn’t attempt to overrule or overpower,” Muirhead explained.
“It’s a difficult balance to get right, particularly with non-executive directors who often have very senior roles and are very knowledgable in their own right, and it will require restraint at times in reigning back their interference. But it’s also incumbent on the executive board to push back at times when non-execs are more interfering than would be desirable.”
In keeping with the topic of the key to a FD and CEO relationship, Equity FD founder Sarah Hunt, said: “I think it works best when there’s a real peer-level respect and that it’s an actual team with complementary skills – you need to have the same agenda and business focus, so if the CEO goes under a bus, the FD could pick the reins up.
“I’m not suggesting you need a wannabe chief executive, but somebody that has that breadth of business mindset. This is about the business, not finance – it’s about being the other part of that executive team when it’s a righthand man or woman to the chief exec. Often that is when skills are different. Often businesses are at different stages and it can be quite tough at times to get a chief exec to see they do need somebody with a different background, someone that can help take the business from where it is now to where it wants to be – not just somebody that supports the same football team. I think the FD can help put the structures and processes in place, scaffolding if you like, for the future – so different experiences to the maverick chief exec to help grow the business.”
With such strong thoughts about the role of the FD and how those in the position can be different reflection to the CEO, the debate moved on to the things that should be discussed during FD job interviews, though Hunt explained that the idea of “interviews” should be replaced with “meetings” at such a high hiring level.
“It is about sitting down together and talking about ‘are we going to be a good team to take this business forward’, rather than ‘do we like each other’. It’s an incredibly easy, human thing to do and think ‘oh I really like him, we got on great’ but, actually, how are you going to get on when it’s not great?” Hunt reasoned.
“I would very much encourage discussions around failures. Get people to talk about how they’ve dealt with things that have gone wrong, not just about how great it’s been. I think having meetings, not interviews, and not recruiting in your own image, is very important in either direction.”
She explained that a lot of companies, particularly the young tech businesses haven’t had a financial partner before, so will need to understand what that will feel like. With meetings, and even an invite to make a presentation to the board will be beneficial for everyone involved in the recruitment process.
“It’s great from a business perspective to see how this person will work, but also it’s great from the FD’s perspective, it’s the nearest they’re going to get to seeing how it will be in real life” Hunt said.
“Recruitment is a flawed process, you don’t know how it’s going to be until you get there and that’s the closest you can get. You can see how the presentation goes, how it feels, how the board reacts to what you’ve got to say and I think that’s a really crucial part of the process.”
Next, a look at the time a CFO overpowered the CEO and why a financial background makes for a natural path to become a chairman.
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