Lower rates create an opportunity for CFOs to renew their board relationships

After a few long years of “higher for longer,” inflation is down. The Fed has signaled an aggressive rate cutting strategy. The gears of liquidity are finally starting to turn!

How’s your business’s relationship with its advisory board?

In order to move fast on any #IPO or deal making opportunities during a period of falling interest rates, the C-suite and its board need to work in lockstep with each other. That kind of harmony does not spring out of thin air. It has to be earned over time, and it’s not easy work. Tell me if this scenario sounds familiar: the board raises its collective hackles at the chief financial officer, whose mandate of financial discipline comes off as saying “No” to everyone else. The board, in turn, appear to be micromanaging meddlers who get in the way of the work that needs to be done.

Obviously, this is not a workplace dynamic that will carry your company to success. The good news is that it doesn’t have to be this way. I have worked with CFOs who work like bridge builders, not gatekeepers, with their boards. It is possible to steward a business’s financial health and maintain positive relationships with advisory boards.

Here are three elements of genuine, collaborative relationships I see in the CFOs who build real alignment:

1. Don’t wait for permission to build relationships

At quarterly board meetings, it’s not uncommon for CFOs to info dump the financial figures and performance metrics to a group of board members who are all hearing that information for the first time. This does not have to be the beginning and end of your relationship with the board.

The CFOs I see who really build alignment with their boards will go out of their way to foster one-on-one relationships with board members. They bring in the board for more frequent meetings to offer financial updates, perhaps on a monthly cadence. That way, the CFO and the board can go beyond blind reactions to the company’s finances at the quarterly meetings. At that point, everyone knows the lay of the land, because of the ground work the CFO has already put in. They can spend that time more productively, discussing strategy and next steps.

Don’t discount the power that comes with one-on-one calls and relationship-building. A board will naturally work better with someone they like and understand. Informal touchpoints like this will create lasting bonds for everyone’s mutual benefit. If you’re looking for an engraved invitation to get proactive with your board, consider this your official nudge!

2. Get the whole team involved

Meetings with your board shouldn’t feel like the CFO and the CEO against the world. Your business is full of leaders and sharp-eyed professionals. Empower the rest of your leadership team to speak up and feed the board’s curiosity.

When folks like the CMO, CTO, head of sales, and top product managers join conversations with your board, you open up a wide range of answers and validations the board can receive to guide their own efforts. You present unity and alignment to the board. When the whole team participates, you create more chances to show a thoughtful strategy and a united presence to your board.

To that end, push for offsite, in-person events to build consensus with your business’s advisory board. Remote work opened the floodgates for long-distance collaboration and reshaped the structure of just about every professional services industry. But there is something to be said about seeing each other as full people instead of floating heads on a screen. In-person offsites have a way of defusing potential conflict, and should be an indispensable part of a CFO’s board relations toolkit.

3. Everyone brings valuable perspectives

You don’t have to agree with everything your board says, but every so often I find it helps for CFOs and board members to take a deep breath and a step back. Most of the people who sit on advisory boards have their eyes on more businesses than yours. They might see bigger patterns and trends that you can’t, because the CFO’s focus is on the financial integrity of one business. There is genuine value in a board’s perspective, even if you disagree on the particulars.

On the flip side, the CFO’s role should command respect. They deal in the realities of the business’s progress, resources, and limitations. The board can’t always get what they want - at least, not right away. But when leaders put in the work to align with those boards, pushback stops feeling like a battle. Instead of saying “No” through gritted teeth, there is a will to work together to reach a “Yes.”

And this is the time to start building those relationships. The Sept. 18 rate cut from the Fed, the first in four years, won’t be the last. The central bank is signaling an aggressive strategy to bolster the labor market and kick-start innovation in technology and other sectors that were caught in a holding pattern. Better, closer relationships between the C-suite and their boards are likely to be deciding factors in who gets to take part in the growth opportunities just around the corner.