The traditional view of the CFO is that of a bean-counter, dull, boring, eyes firmly in the past, can’t see the big picture, etc. A less well understood view of the role of the CFO is that of trusted lieutenant to the CEO—a close confidante looking around corners to the future and ensuring the house doesn’t burn at the same time.
While many CEOs wise enough to hire a CFO understand this, there’s more to the CFO than just pointing out the numbers. In the past, CFOs had to be skilled at two things: finance and accounting. Today, modern CFOs have to possess talents beyond the obvious and offer critical insights beyond the quantitative data.
At monthly board meetings, CEOs need a business partner they can depend upon to deliver critical business insights and reinforce your board members’ confidence in their leadership in building a business underpinned with solid metrics and financial judgement. There is no better partner for a startup founder or CEO to have in a board meeting than a well prepared CFO.
Keep your eyes in the past, but your brain in the future
Just like the map is not the terrain, the spreadsheet is not the business. A good map will provide you with the straightest path to a much more valuable company long term. In a well run company, the CEO typically owns the terrain and the CFO owns the map.
A good finance executive almost always pays for themselves immediately, whether it’s through a better fundraise, optimized spending and cash flow, or more revenue due to key insights.
Deliver board papers and financials in advance
A productive board meeting begins in advance. One of the best ways to stay on schedule during a board meeting is to provide financial information to board members a few days before the meeting. Nothing annoys a meeting attendee more than receiving pertinent materials the night before.
Delivering materials early enables board members to review it thoroughly beforehand and come prepared with questions. Board meetings are significantly more productive when the attendees have had time to read and process the information.
Write the Agenda
The purpose of board meetings is for governance and advice on all areas of the company, not just finance. For that reason, the meeting should be kept on track with the agenda. As a startup’s CFO, you can ensure these meetings cover all of the important discussion points.
Board members are usually very experienced people, who can add value to the direction of the company. Because of this experience, they may be inclined to pivot topics at times. However, the meeting needs to run in a manner that all points on the agenda get covered and not overinfluenced in one direction.
Speak to the Numbers
Financial transparency and accuracy is the bedrock of every successful company. Whether you’re a well established organization or a fledgling startup, it instills trust and confidence among every member of your board. During the financial analysis portion of the agenda, help your meeting attendees understand how the business is performing. Cover the metrics which are most important to the company and how you compare to your competition.
Also, demonstrate how the company’s actual performance is progressing against short-term and long-term goals. Within SaaS, some key metrics to look at may be any recent churn, customer onboarding, and long-term pricing strategy.
Review Business Drivers
What actions or activities have been responsible for your company’s performance? This portion of the board report may include an overview of customer acquisition/onboarding, website traffic, upgrades/usage increases, or other influential business drivers.
Looking beyond the financials means a CFO will need to partner with the marketing and sales departments to understand the influences each have on the performance of the company.
Put the Issues On the Table
Yes, it’s always best to start with the good news. Take the time to highlight the company’s successes and share its victories. Then, move on to the challenges and educate the board about the issues the company is facing. That’s what they are there for: to offer useful advice on how to correct those issues.
Communicate With the Mission in Mind
A SaaS company having a CFO who not only speaks to the company’s most important data, but also communicates its value and vision to board members in a clear, credible manner is invaluable. It’s essential that you can speak to your mission in an exciting way. Articulating the key business drivers behind the mission is only half the puzzle.
Focus on the Future
Finally, the CFO’s board report should include forecasting. This includes an understanding of the customer, the market, and the competition — not just the financial climate. To do that, the CFO needs to collaborate actively with sales, marketing, and development to devise the go-forward strategy.
Based on their collaboration, the CFO can then determine the approach that the company should take on spending and investment.
The Evolution of the CFO Role
In the past, the CFO’s job was simply to report the numbers. However, the times have changed and CFOs are wearing an exciting new hat inside and outside of the boardroom. Over the years, the CFO role has evolved to include more influence, strategy, and decision-making power throughout the company.
Delivering financial results and projections are just two of many responsibilities at board meetings. By stepping beyond traditional functional boundaries and embracing a more active role, CFOs are well-positioned to not only facilitate productive, insightful board meetings, but also contribute to business growth.
Read: Tips for SaaS CFOs