CFOs need to improve their relationship management skills. Also with investors, the CEO, Supervisory Board and other members of the C-suite.
CFOs often get stuck when it comes to managing stakeholder relationships. Stakeholder demands are often in conflict, and CFOs increasingly have to meet the demands of regulators, the demands of investors and other stakeholders.
The high expectations of stakeholders are unlikely to fade in the future.
CFOs will need to respond more effectively to conflicting demands:
Prioritize key stakeholder relationships:
Analyze critical stakeholder relationships and build a strong understanding of what drives them;
With their growing public profile, CFOs need to take a more strategic approach to managing communications with the media, clients, investors and regulators;
Tell a consistent story:
To be credible and build trust, CFOs need to have a consistent story about the company for all stakeholders. As CFOs increasingly become the public face of the organization, in addition to complying with laws and regulations, they must also pay much more attention to the social, moral and ethical consequences of their business operations.
Having a clearly defined "purpose" for the organization - an ultimate goal beyond financial goals - helps provide a framework for this decision-making.
STRENGTH #5 Strong increase in regulation
Meeting new regulations from various regulators is an increasing pressure for the CFO and this is only becoming more urgent as CFOs also have to worry about all kinds of new focus areas such as Digital and Analytics.
In the recent past, customers may have had the greatest potential economic impact on a company. Today, intense oversight means regulators are becoming increasingly important stakeholders for CFOs. The future finance function will need to improve its regulatory knowledge to keep abreast of an ever-changing and uncertain regulatory playing field.
The recession since 2008 has resulted in a dramatic increase in broad regulatory oversight across all sectors. But today, CFOs also have to worry about areas such as Digital and Analytics. These new roles require time from the CFO and his team, while also meeting the ever-growing scrutiny of regulators, government and the public.
Managing the sharp increase in - and complexity of - regulations is just as much about managing stakeholders. By effectively managing stakeholders, organizations can collaborate with regulators and play their part in shaping policy.