How CFOs can enable their directors, and vice-versa

In a perfect world, the relationship between a CFO and his or her board of directors is a symbiotic one. Unfortunately for too many companies, things don’t pan out this way. While executives, shareholders and customers can hurl blame at one another for any perceived flaws of an organization, someone needs to take action at the end of the day. New research findings might show that as hard as CFOs may try, a lack of timely information is hindering their ability to work with board members to solve problems big and small.

According to a survey from CFO Research and software firm Kyriba, corporate board members often feel as though they are missing out on precise data and information about their companies that could enable better responses to risk and crisis.

Survey respondents identified six areas where CFOs were not living up to expectations from board members to keep them informed and deliver “mission-critical” insight that could solve problems and mitigate risks. These categories included (from most to least common concerns):

  • Fraud monitoring and mitigation.
  • Performance risk management.
  • Strategic and operational risk management.
  • Growth strategy support.
  • Cost control or reduction.
  • Strategic decision making.

CFO disconnect: Not for lack of trying

Readers of the study might be perplexed as to why these disconnects continue to pervade businesses, even with the availability of new tools for data analysis and reporting. In addressing the root causes of this issue, survey respondents overwhelmingly cited a silo effect between the C-suite and top shareholders. But drilling deeper into why CFOs were apparently walled off from their boards, the directors themselves were generally hesitant to blame the finance head themselves.

Instead, respondents cited an all-too-familiar problem: An overburdened CFO who lacked the time and resources to actually gather the critical data they need. Nearly one-third of directors polled in the survey said this was the primary reason why they felt out of touch with their company’s operations and direction, leaving them helpless in solving existential problems.

BoardWhen executives and board members have the same level of access to crucial financial data, better working relationships often result.

On the bright side, it appears CFOs are aware of these challenges and have taken steps to address them – 94 percent of survey respondents said their CFO is seeking out better technology and procedures to deliver timely insights to the board of directors. In the view of board members, this is most readily achieved by doing what CFOs already do best – wrangling financial data to compile detailed reports on the health of the company. When asked about the most critical areas where board members rely on CFO input, they overwhelmingly cited budgeting, forecasting and strategic decision-making as top priorities.

The takeaway from the survey for CFOs should be that their boards place a high value on their talents and abilities, but that the time to adopt new systems to support operational excellence is now. When CFOs have the best accounting software and reporting tools at hand, it’s easier to create detailed and useful financial reports for their boards as well as for internal use. From there, the two teams can foster a better sense of cohesion and charge forward into new avenues of business opportunity and change.

Consero is pushing the envelope regarding what CFOs can achieve, giving them more time and resources to make long-term strategic decisions. The improvements that the Finance as a Service model offers is powerful, and they include more cohesive relationships between executives and their board of directors. When both sides have access to accurate, timely financial information, they may well discover new opportunities that will drive the business forward.

Consero FaaS: Disrupting the Outdated Traditional F&A Model

  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons