Any time an ex-CFO of the biggest company (by revenue) in the United States has something to say, you can bet it’s worth listening to. I was interested to read Charles Holley’s description of how he cultivated a healthy relationship with Walmart’s board in this Wall Street Journal’s CFO Journal article.
Now that Holley is retired from Walmart, he’s acting as an independent senior advisor to Deloitte and a CFO-in-Residence with the firm’s CFO Program. Holley is looking back on the hard-won fruits of his five-plus years’ experience with the retailer. There are rich insights here for Chief Tax Officers (CTOs) who want to advance their own board relationships and/or help their CFOs do the same. And I can add a few of my own from a CTO’s point of view.
Building trust seems to be the key insight. Holley emphasizes the “ability to convey a sense of authority, wisdom and depth of knowledge of the business when discussing issues of great import to the company.” His specific points include:
- Understand the board’s personality and communicate effectively. Boards differ in their communication styles; it’s worth taking the time to find out not only what information they want, but also how they want it delivered.
- Develop a focused talent agenda and succession plan. Boards want to know that there’s a strong bench in place, as well as a proactive staffing plan.
- Know the business and strategy. Understanding the details of the business’ operations enables leaders to offer “strong, independent viewpoints on the company’s strengths, challenges and gaps.”
And now for my own insights. Effective CTOs can help directors (and CFOs) feel less intimidated by tax issues. They can do this by keeping discussions about tax issues clear, concise and relatable. Don’t confuse them with extraneous information. What they need from you is an understanding of what the tax issues and risks are and what you are doing to address them. They should walk away knowing that you’ve got their backs.
As the tax function continues to extend its strategic range and value (see my colleague Tricia Schafer-Petrecz’s post on the board-level implications of BEPS, for example), CTOs who invest time and effort to sharpen their ability to manage this crucial relationship will find they can reap the rewards of a well-informed board of directors and CFO.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.