Managing Up: Boards, Investors and Partners

Managing up is the art of working well with others, in particular those over whom you have no direct authority.  For CFOs, those parties can include boards of directors, investors (venture or public) and partners.  The tactics involved include cultivating goodwill, delivering timely and informative analyses and ensuring the right information is shared with the right people. Now more than ever, CFOs are taking careful note of how they keep their boards, investors and partners informed and engaged – all with an eye on furthering the company’s goals.

“The challenges of this year have highlighted the importance of communication and engagement,” said Jason Kropp, partner, WilmerHale.  “It’s critical to ensure that those with a stake in your company have the appropriate information. Part of this role means paying close attention to communications up front, so that you limit the potential for painful disruptions after the fact.”   

For all stakeholders, it is vital to cultivate goodwill. This may mean taking (or making) a call sooner rather than later, or engaging in additional back-and-forth as needed.  With everyone working primarily from home, CFOs and other senior financial executives may need to reiterate key facts or upcoming developments. 

Disclosure is important, but don’t fall into the vortex of sending so much information that no one can keep track.  Never has “optimal minimal” been more important than today.  Without side conversations or informal hallway chats to narrow in on the most important information, the responsibility lies squarely with the CFO to curate appropriately.

Sharing the right information sometimes means saying no.  For example, public investors may want more competitive information than the CFO feels appropriate to divulge – such as the margin of a particular product line, or the average time a deal is in the pipeline.  While this may be appropriate for venture capital investors, a simple, “That’s not information we release. As you can imagine, we don’t want our competitors stepping on our margins/into our pipeline,” may be in order. 

Board members, investors and partners are all important groups with whom the CFO must manage up. Establishing goodwill and providing useful and appropriate information are key not only to mutually beneficial relationships, but also the success of the business.