EQUIP YOUR BOARD WITH THE RIGHT LEVEL OF DETAIL.
As a CFO, your superpower is the ability to distill complicated financials and analysis in a clear and concise way. There is no better place to show it off than at the quarterly board meeting.
(1) Not everyone at the board meeting understands the financials as well as you do. Sharing shortened versions of the financial statements with the most pertinent details keeps everyone on the same page without making their heads spin.
(2) In order to get where you want to go, you have to understand where you’ve been. Showing historical financial data and the future forecast can help give everyone context on the bigger picture.
(3) Great financial slides visualize the data as much as possible to help everyone understand the story.
(4) Your job is more than just reporting financial results. The board meeting is a great opportunity to measure and show progress for the most important goals of the business.
Want to see our ideal financial board meeting slide pack?
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HOW CAN YOU IMPROVE YOUR SECTION OF THE BOARD MEETING?
Let’s face it; by the time the board gets to the finance section, everyone’s eyes are glazed over. Let’s change that.
The above downloadable template helps imbed data-driven rigor into the decisions made at the board meeting. Here’s how.
SIMPLIFY THE FINANCIALS. There is power in being concise - while it is easy to plop in the entire income statement into a board deck, take some time to assess the most important parts worth discussing. A good place to start with this is understanding what your voiceover would be if you did show the whole income statement: what matters most? That’s a good guiding principle for what you should summarize and show. For our companies, that generally means bucketing revenues into categories that help everyone better understand the growth strategy of the business (such as recurring vs. one-time). This often also means consolidating cost information and bucketing expenses into their larger categories: R&D, S&M, and G&A spend. If folks want to talk details, they can always find them in the monthly financials.
SHOW THE BIGGER PICTURE. Financials are best understood in comparison to something else. Revenue is $5 million this quarter means a very different thing if it was $4 million last quarter or $10 million in the same quarter last year. In order to give context on where the business has been and where it is heading, find opportunities to show historical information for comparison (especially for revenue, EBITDA, and major expense buckets), along with an idea of what it may look like in the future (what is budgeted for the rest of the year? What could the next 2-3 years look like?). It’s important to keep SIMPLICITY in mind - no need to show entire screen shots of 10-year models, but what does this mean for revenue? Profitability? Future investment in the expense side of the business?
VISUALIZE THE DATA. While some other members of the board may be as left-brained as you are, and that’s ok! Help everyone understand the story that the data is telling through use of graphs, charts, and (here’s that word again) simplicity. A common mistake we see is when CFOs want all of the information available, so they default to showing all of the numbers in tables and spreadsheets. We’ve found the more you can bring people along with visualization, the better the conversation. The downloadable PDF shows some examples of where graph and charts help most, and know that you can always have the spreadsheets in your back pocket if someone has a more detailed question.
FINANCE IS MORE THAN JUST FINANCIAL RESULTS. Taking #1-3 in mind, apply your abilities to other areas of the business. This is where strong collaboration and trust comes in. The CFOs who are able to help our CROs understand their bookings, our CTOs understand their investment ROI, our CEOs measure against the most strategic goals of the business are irreplaceable (and not to mention: it makes the work more interesting and rewarding, too). The presentation gives a few examples of how we’ve seen this done, but this type of work and analysis will change and vary by business.