The Master CFO Series                        Back seat or                        center stage?                        CFOs...
The CFO’s role           Title                                                                                            ...
In this report                                                      The Master CFO Series is a collection of              ...
Executive summaryBack seat or center stage?CFOs can rarely be accused of seeking the media limelight. When crisis strikes ...
The infrastructure to support CFOs has not caught                         team on a strategy to proactively build relation...
More CFOs have a more active role with the media4                 Back seat or center stage? CFOs and the media
A media interview may ostensibly be set up to focus on acompany’s latest financial results, but few journalists willresist...
Another explanation might be increased demands from                      Chart 2: The frequency with which respondents spe...
More than 4 out of 10 CFOs                                                                                       say that ...
A changing media is impacting the way CFOs needto communicate8                 Back seat or center stage? CFOs and the media
“ he media are feeding off each other in a way that they T have never done before. And very often it’ll be the CFO who nee...
One crisis management expert within a recent Ernst  Young                                Greater media scrutiny of the num...
“ ournalists used to treat                                                                                       J        ...
CFOs’ confidence levels in dealing with the media arepotentially misplaced12                 Back seat or center stage? CF...
“ uddenly they get asked about something outside of their S core area of responsibility and they’re expected to know thing...
Chart 6: Percentage of respondents who rate their ability to deal                                Perhaps in recognition of...
The three R’s: regret, reason and remedyWhen under fire during a crisis situation, executives shouldalways remember the th...
The infrastructure to support CFOs has not caught upwith their broadening media role16                Back seat or center ...
“ ll too often, CFOs come out of a studio and think that it A went well because they managed to stay out of trouble.”With ...
Chart 9 : Percentage of respondents who strongly agree or agree                           General training for CFOs on dea...
“ ou may be the best pilot                                                                            Y                   ...
Emerging from the wings     Media engagement beyond financial reporting and print media — the reported comfort     zone of...
Respondent demographicsThe following charts show the demographic make up of the 260 CFOs we surveyed.Title of respondents ...
Ernst  YoungAssurance | Tax | Transactions | AdvisoryAbout Ernst  YoungErnst  Young is a global leader in assurance, tax,t...
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Back seat or center stage? CFOs and the media

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The Master CFO Series is a collection of studies from Ernst & Young which provide insight on events and experiences that CFOs encounter as part of their role. This series is a part of our Europe, Middle East, India and Africa (EMEIA) CFO program. The program looks at aspects of personal interest to CFOs, and aspiring CFOs, as they develop themselves and their teams, and learn from others within their community.
This first report in The Master CFO Series relates to the CFO’s role in communicating with the media. It is based on a survey conducted with 260 CFOs across EMEIA, as well as insights drawn from interviews with experts in media and communication.
The survey was conducted by the Economist Intelligence Unit.
Our thanks to all who participated and shared their experience.

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Back seat or center stage? CFOs and the media

  1. 1. The Master CFO Series Back seat or center stage? CFOs and the media
  2. 2. The CFO’s role Title We believe these six segments represent the breadth of the CFO’s remit. The leading CFOs we work with typically have some involvement in each of these six — either directly or through their team. While the weighting of that involvement will depend on the maturity and ambition of the individual, the sector and scale of the finance function and economic stability, they are all critical to effective leadership. rnal T the exte N o n t ce E tio pla ca rket Trus ting E i the un ma M X nu m m P E Representing b m Co Ensuring business O the organization’s C er progress on decisions are s EL UT strategic goals grounded in sound to external financial criteria gy stakeholders DEV ION ate ment of business str 6 1 Providing insight Developing and Providing insight The CFO’s and analysis to defining the 5 2 support CEO and overall strategy contribution for your organization other senior managers elop 4 3 Dev Funding, enabling Leading key and executing initiatives in finance strategy set that support overall Fu by CEO strategic goals er nd g rd o in or in ga niz se ati hou ona ur l strate g yo gy Gettin EN ABLEMENTB Back seat or center stage? CFOs and the media
  3. 3. In this report The Master CFO Series is a collection of studies from Ernst & Young which provideBack seat or center stage? 2 insight on events and experiences that CFOs encounter as part of their role.More CFOs have a more activerole with the media 4 This series is a part of our Europe, MiddleA changing media is impacting East, India and Africa (EMEIA) CFO program.the way CFOs need to communicate 8 The program looks at aspects of personalCFOs’ confidence levels in dealing with interest to CFOs, and aspiring CFOs, as theythe media are potentially misplaced 12 develop themselves and their teams, and learn from others within their community.The infrastructure to support CFOshas not caught up with their This first report in The Master CFO Seriesbroadening media role 16 relates to the CFO’s role in communicatingEmerging from the wings 20 with the media. It is based on a survey conducted with 260 CFOs across EMEIA,Respondent demographics 21 as well as insights drawn from interviews with experts in media and communication. The survey was conducted by the Economist Intelligence Unit. Our thanks to all who participated and shared their experience. Back seat or center stage? CFOs and the media 1
  4. 4. Executive summaryBack seat or center stage?CFOs can rarely be accused of seeking the media limelight. When crisis strikes or a majorannouncement is made, it is the chief executive who is typically expected to take center stage.While CFOs are always on hand at press conferences to run through financial results or answertechnical questions, they usually take a back seat when it comes to courting journalists or buildinga public profile. But, there are signs that this is changing.Not all CFOs will have a role, or indeed want a role, beyond A changing media is impacting the way CFOs needengaging with the media on the annual or quarterly to communicatecommunication of financial results. However, a significant numberare involved in media communication which is broader, both in The majority of respondents deal with the media in presentingsubject matter — given a widening role and stakeholder routine financial results and are most likely to have representedexpectations for a narrative beyond pure numbers — and channel, their organization in the print media. However, the fragmentationgiven the fragmentation of the media and fierce competition to of media channels, the emergence of a 24/7 “rolling news” modelget the story. But are they getting the support they need to make and the increasing sophistication of financial news reporting, arethe most of this expanding role? fundamentally changing the way the media works and the way in which CFOs need to respond.More CFOs have a more active role with the media CFOs’ confidence levels in dealing with the mediaFor the majority of survey respondents, media relations remains a are potentially misplacedrelatively infrequent event that follows the cycle of financialreporting, with Group CFOs and those in financial services Eight out of 10 CFOs rate their confidence in dealing with the mediainteracting with the media most frequently. But, a significant as good or excellent, with the highest levels of confidence reportedminority has reported that their remit is being extended to include by Group CFOs (as opposed to divisional or regional CFOs) andresponsibility for media engagement across a broader range of financial services respondents, who are likely to have greaterissues such as business restructuring, crisis management and experience. Yet, it is possible that, for some, these confidencelong-term strategy. More than 4 out of 10 say that they are levels reflect a media role limited to the communication of financialcommunicating with the media more often than they were three results. The drop in comfort around communicating on non-financialyears ago, and spending more time doing so. performance and long-term strategy would suggest so. Perhaps in recognition of the shifting media landscape and increasing demands for communication on issues outside of financial results, many CFOs do acknowledge that they would benefit from greater exposure to media situations.2 Back seat or center stage? CFOs and the media
  5. 5. The infrastructure to support CFOs has not caught team on a strategy to proactively build relationships with keyup with their broadening media role journalists and those who influence them. While practiced at communicating financial results, CFOs may want to considerThe support which respondents receive appears surprisingly support and training to help them navigate the worst but also,limited, given more are speaking on broader issues across more more importantly, take full advantage of the opportunities thatvaried channels. Only 38% of respondents receive briefings from their broadening role offers.the press office or a media training company before majorannouncements, and only 26% work with their communications Media relations: 10 tips for the CFO 1. Prepare for the unexpected. Spend time before an Also, get to know the analysts and commentators who these interview thinking through possible questions. Consider the journalists trust for information. business in its broadest sense — are there any non-financial 7. Prepare for everyday situations — not just a crisis. issues that could crop up in an interview? Training in media relations often focuses on how executives 2. Have clear goals for an interview. It is advisable to work should deal with the media during a crisis situation. This is with the corporate communications team to determine a important, but you should also practice for more clear set of messages for an interview. Two to three key straightforward media appearances, such as presenting points that you want to get across are usually enough. financial results. 3. Keep it simple. Finance can be complex, but the media 8. Make the time for media training. There is no substitute for usually expects straightforward language and a clear story. experience in media communications, but do not assume that Make sure you do not get too technical and think in advance you must go through a “baptism of fire” in order to become how you can simplify technical points. comfortable with this activity. Training and simulations can be just as valuable to increase confidence levels. 4. Don’t be afraid to dig in. Under persistent questioning, it is perfectly acceptable to stick to the message you want to 9. Work in tandem with the corporate communications team. convey — even if it means repeating yourself. Do not be Our survey suggests that not all corporate communications persuaded to deviate and get onto difficult ground, and teams currently provide appropriate support for CFOs. If this never lie. is the case, you should proactively seek out these teams, and work closely with them to prepare for appearances and devise 5. Ask for feedback. It is difficult to judge effectively your a long-term media strategy for yourself. own performance. Ask your corporate communications team for constructive feedback in order to improve 10. Recalibrate your measure of successful media relations. performance and address weaknesses. Do not regard a media appearance as successful if you get through it without getting into trouble. A media interview is 6. Get to know journalists and their agendas. A proactive first and foremost an opportunity for you to sell your approach to meeting journalists and understanding their company or yourself. A measure of success therefore needs interests and agendas can pay dividends over the long term to be based on a positive outcome, not the absence of a by building a trusting and open relationship with the media. negative one. Back seat or center stage? CFOs and the media 3
  6. 6. More CFOs have a more active role with the media4 Back seat or center stage? CFOs and the media
  7. 7. A media interview may ostensibly be set up to focus on acompany’s latest financial results, but few journalists willresist the opportunity to pose broader questions.The days when most CFOs were largely limited to up to focus on a company’s latest financial results, but few journaliststhe annual presentation of financial results appear will resist the opportunity to pose broader questions about the future prospects of the business, or to seek an explanation about anto be numbered. Today, finance is a big story. emerging problem or crisis. Hence, CFOs may find themselvesMore CFOs are expected to assume a greater discussing topics that fall outside of their core area of expertise.responsibility for engaging with the media across a Chart 1: The percentage of respondents who feel they have thebroader range of topics and channels. responsibility to communicate with the media, and also theThe primary media responsibility for CFOs remains the experience of communicating with the media, on these subjectscommunication of financial information. Seven out of 10 survey 71respondents say that they are responsible for reporting routine Routine financial results 61financial results to the media, while 57% say that it falls to them 57 Special financial announcementsto announce special financial developments, such as a profit (e.g., profit warning or dividend cut) 52warning or dividend cut. But, beyond these core competencies, a 54 Capital raising announcementsgrowing number of CFOs have found that their remit is being 44extended. Already, a significant minority say that they are 43 Regulatory information and disclosuresresponsible for dealing with the media across a range of broader 44issues, including business restructuring or cost cutting, crisis 42 Business restructuring or cost cuttingmanagement and long-term strategy (see chart 1). 41 Crisis management (e.g., product recall, 40These results suggest that reality has moved ahead of theory in major industrial accident, fraud) 39some cases. Here, we see CFOs with experience of dealing with the 38 Long-term strategymedia on issues for which they do not consider themselves 41responsible. For example, 42% say that they have experience of Corroboration of CEO’s claims/plans 37communicating with the media about the company’s growth plans, 27 Growth plans (e.g., MA, 30but only 30% see it as their responsibility. Similarly, 38% report international expansion) 42having experience of communicating non-financial KPIs such as Non-financial KPIs (e.g., corporate social 20customer satisfaction and corporate social responsibility, and yet responsibility, customer satisfaction) 38only 20% see it as their responsibility. The nature of modern Responsibility Experiencejournalism may explain this. A media interview may ostensibly be set Back seat or center stage? CFOs and the media 5
  8. 8. Another explanation might be increased demands from Chart 2: The frequency with which respondents speak with theshareholders for information which is broader than just the media (percentage)numbers. The media, and investors as consumers of media, are Daily 0looking for a broader picture of business performance — anarrative that more fully explains the numbers and describes Weekly 2where the business is headed, as well as where it’s been. 14 MonthlyFor the most part, media relations for CFOs remain a relatively 38infrequent event that follows the cycle of financial reporting. The Quarterlyvast majority of respondents speak with the media either 39 Annuallyquarterly or less frequently and only a tiny proportion do so 7either weekly or daily (see chart 2). Group CFOs are more likely Less than annuallyto engage with the media on a frequent basis, with almost aquarter speaking with journalists at least monthly. CFOs from But, for a significant minority of respondents, the frequency offinancial services companies also tend to have more frequent media communications, and the time they allocate to this activity,interactions, which no doubt reflects public interest in the is increasing. More than 4 out of 10 CFOs say that they areindustry following the financial crisis. communicating with the media more often, while a similar proportion indicate that they are spending more time on this activity (see chart 3). Broadening responsibilities, along with a media hungry for business content, appear to be driving this trend.6 Back seat or center stage? CFOs and the media
  9. 9. More than 4 out of 10 CFOs say that they are communicating with the media more often.Chart 3: Percentage of respondents who have experienced anincrease in the nature of their personal communications with themedia over the last three years 6 Frequency of media communication 38 Time spent on media communication 0 44 4 Level of scrutiny from the media 36 4Quality of relationship with media stakeholders 31 Significant Increase increase Back seat or center stage? CFOs and the media 7
  10. 10. A changing media is impacting the way CFOs needto communicate8 Back seat or center stage? CFOs and the media
  11. 11. “ he media are feeding off each other in a way that they T have never done before. And very often it’ll be the CFO who needs to react and get on the air.”The past decade has seen significant change in the A story broadcast on one media outlet will quickly be picked up bymedia industry. Developments in communications others so that, within a matter of minutes, it will be reported across a wide range of different channels. The speed with whichtechnology have caused a fragmentation of stories can be distributed places much greater pressure onmedia across a bewildering array of online and companies to respond quickly to news. “The media are feeding offoffline channels. Reporting has shifted to a 24/7, each other in a way that they have never done before,” says“rolling news” model, with developments in Andrew Harvey, a tutor with his media training companyemerging stories being broadcast as they happen. HarveyLeach and a former BBC and ITN television newsreader.Competition for audiences and advertisers has “And very often it’ll be the CFO who needs to react and get on the air. For example, you can do an interview with one of thebecome increasingly intense, which has piled broadsheets. The Evening Standard is paying attention, as ispressure on newsrooms to be the first to report Radio 5. They pick it up and run with the story. The next day thea story. And, our survey suggests, there is a story takes a new direction on one of the business newssignificant and growing number of CFOs who the programs. It’s sometimes not one interview in isolation.”media look to for comment. There is now huge competition among media providers to be theThe CFOs questioned for this research are most likely to have first to report on emerging stories. “Part of the pressure onrepresented their company in the national print press, with the 24-hour news programs is to beat the opposition,” saysspecialist financial press the second most likely channel. Only 6% Mr. Harvey. “If a news channel receives some information about aof respondents have represented their company on television, company, it will put it out straightaway and repeat it every quarteralthough this figure rises slightly to 10% among the Group CFOs. of an hour until someone from the company comes on air toDespite major developments in online media over the past few corroborate or refute it.”years, blogs and internet-only channels remain of minorityinterest for CFOs, with only 12% having handled this particularaspect of media communications over the past six months (seechart 4). Yet, while most CFOs are more familiar, andundoubtedly more comfortable, with dealing with the print media,this is not the only channel through which the story may run. Back seat or center stage? CFOs and the media 9
  12. 12. One crisis management expert within a recent Ernst Young Greater media scrutiny of the numbersreport1 providing audit committee chair perspectives on the Changes in the media landscape have coincided with a growingsubject commented: “News is hard to control. There is a snaking suspicion of big business caused by the corporate governancespiral to the external coverage: first there are reports, then scandals and financial crisis of the last decade. Among somemisinformation, speculation, allegation and judgment.” Another sections of the media, this has caused a gradual erosion ofcommented: “It’s hard to close down sources of misinformation. confidence in business leaders, along with greater questioning ofSo, you need to create your own source of information and the integrity and accuracy of financial information. This,redirect key constituents there.” combined with the greater sophistication in financial newsChart 4: The media channels in which respondents have reporting, presents the CFO with both opportunity and risk.represented their organization in the last six months (percentage) “The media is much more confident in its questioning and 37 reporting of financial issues than ever before,” says Mr. Harvey. National print press “Whereas previously, journalists would have just asked a few Specialist financial press 21 questions and hoped they would get away with not knowing much about the business, now there are a lot of people in the industry 16 Local print press who have really serious knowledge.” 12 Blogs/internet-only channels CFOs often bear the brunt of this scrutiny because they are seen 7 as having overall responsibility for a company’s financialSpecialist trade/industry press reporting. “Presenting the annual or quarterly figures has Television 6 become fraught with difficulties for CFOs because journalists will pose in-depth questions about them and start from the basis that 1 Radio they may not be correct,” says Stephen Carver, an expert on Other 1 media and crisis management at the Cranfield School of Management. “Journalists used to treat annual accounts as a bible, but now they are more likely to view them as a story book.”1 risis communications: InSights for European Audit Committee Members, Ernst Young, C October 2010.10 Back seat or center stage? CFOs and the media
  13. 13. “ ournalists used to treat J annual accounts as a bible, but now they are more likely to view them as a story book.”No wonder then that a significant number of CFOs view the media The emergence of a sound bite cultureas increasingly hostile in its approach. Almost two-thirds of There are concerns, too, among almost 4 out of 10 respondentsrespondents agree that the media has become more aggressive that journalists will misquote them or take their remarks out ofand demanding of information, while 49% think that the crisis has context. The nature of the modern media means that commentsmade the media more suspicious of business leaders (see chart 5). will sometimes be taken out of context. The speed with which theCFOs from public companies and financial services organizations media must respond to emerging stories, along with theare particularly likely to recognize this increase in aggression and competition to retain an audience that is confronted with a vastscrutiny. And, in a telling finding, just 33% of all respondents say range of choice has fostered a “sound bite culture” in which storiesthat they enjoy dealing with the media. must be conveyed as quickly and straightforwardly as possible.Chart 5: Percentage of respondents who either strongly agree or “It’s a real challenge for CFOs to get their message across in aagree with these statements way that is concise, quotable but still conveys what is often quite The financial crisis has made the media more 6 complex information in an accurate way,” says Mr. Carver. aggressive and demanding of information Mr. Harvey comments: “I’ve seen 30 page question and answer 54 The crisis has made the media more 3 documents prepared for a CFO accustomed to presenting detailed suspicious of business leaders CFOs have an opportunity to build strong 46 information to investors. What use is that if you need to conveyrelationships with the media because they are seen 6 as more objective than other business leaders two or three clear messages during a three-minute interview on 30 I think my role is to handle press 5 the Today program?” enquiries on a reactive basis and not proactively seek media coverage 31 4 The CFO also needs to consider that they may be judged by Concern that journalists will misquote me or takequotes out of context make me wary of the media 32 different standards when providing quotes to the media. 8 Mr. Carver points out that what the CEO might get away with in a I enjoy dealing with the media 25 sound bite may not be true for the CFO. “The CFO is expected to Goodwill built up with the media in good 3 times has helped temper media negativity be objective, fact based, and is arguably governed by a stricter stemming from the crisis 30 code of conduct than the CEO. When communicating, the CFO Strongly agree Agree must be careful of being quoted in such a way that the resulting sound bite doesn’t undermine these attributes.” Back seat or center stage? CFOs and the media 11
  14. 14. CFOs’ confidence levels in dealing with the media arepotentially misplaced12 Back seat or center stage? CFOs and the media
  15. 15. “ uddenly they get asked about something outside of their S core area of responsibility and they’re expected to know things over and above their financial remit. This is where the problems often start.”Given nearly half of CFOs surveyed report an Just 44% rate their skills at communicating on non-financial keyexpanding remit with regards to their media performance indicators as excellent or good, while 49% offer the same assessment of their abilities when these discussions extendinteraction, and nearly two-thirds regard media into messages related to long-term strategy. True, these may notstakeholders as increasingly aggressive, it is be core areas of responsibility for some CFOs, but it is impossiblesurprising that the reported level of confidence is to rule out questions on these subjects in what may have beenso high. Eight out of 10 rate their overall level of presented as a finance-focused interview.confidence in dealing with the media as excellent “I think there can be a certain level of overconfidence with someor good. The highest levels of confidence are CFOs when it comes to dealing with the media,” says Mr. Harvey.reported by Group CFOs (as opposed to divisional “There’s a sense that they have all the figures at their fingertipsand regional) and those from financial services and so feel fully capable of answering any question that comesorganizations, who are likely to have greater their way. But then suddenly they get asked about something outside of their core area of responsibility and they’re expected toexperience. But, while CFOs may feel comfortable know things over and above their financial remit. This is whereon the familiar subject of financial information, the problems often start.”their confidence levels drop when they are beingquizzed on non-financial issues. Back seat or center stage? CFOs and the media 13
  16. 16. Chart 6: Percentage of respondents who rate their ability to deal Perhaps in recognition of the shifting media landscape andwith the following activities as excellent or good increasing demand for communication on issues outside of financial results, many CFOs do acknowledge that they would Overall level of confidence when 28 dealing with the media benefit from greater exposure to media situations. Respondents 55 Communicating results and other 23 are most likely to consider more experience as the most helpful core financial information 52 way of improving their abilities at communicating with the media Giving journalists the right amount of 22 (see chart 7). information without overstepping the mark 51 25 Chart 7: Percentage of respondents who believe these are the Dealing with difficult questions 45 areas which would be most helpful in improving their ability to 20 Ability to deal with media during times of crisis deal with the media 44 14 50 Partnering with the CEO when More experience dealing with the media 46 32 Building a good rapport with key 18 Better support from press office journalists and commentators 42 30Communicating non-financial KPIs which extend to 8 More trainingmessages relating to long-term corporate strategy 41 Clearer lines of responsibility 23 14 between CEO and CFO Communicating non-financial KPIs 30 More time to be proactive in building 22 Excellent Good relationships with media stakeholders 17 Informal advice from peers and colleagues Greater freedom to comment on topics 16 outside of my core financial remit Sticking to topics and issues relating to my core 13 finance role that I know and understand well 2 None of the above14 Back seat or center stage? CFOs and the media
  17. 17. The three R’s: regret, reason and remedyWhen under fire during a crisis situation, executives shouldalways remember the three R’s.They must first show empathy for those affected (regret);second, explain what happened (reason); and finally, statewhat measure will be taken to fix the problem (remedy).So says Mr. Carver of the Cranfield School of Management:“Often the CEO is best at delivering the ‘Regret’ with thepersonality, energy and drive required to carry this off. The‘Reason’ is something that plays well to the strengths of theCFO. The ‘Remedy’ can be a joint effort between the two. Ifthe CEO and CFO can be joined up and pitch an integratedpoint of view between them at a press conference, I think thiscan work extremely well.” Back seat or center stage? CFOs and the media 15
  18. 18. The infrastructure to support CFOs has not caught upwith their broadening media role16 Back seat or center stage? CFOs and the media
  19. 19. “ ll too often, CFOs come out of a studio and think that it A went well because they managed to stay out of trouble.”With many CFOs taking on a broader role in terms Chart 8: Percentage of respondents who are supported in theseof media communications, one might expect that areas of communication with the media by their organizationcompanies are increasing the level of support that Briefings from press office/media training 38 company before major announcementsthey provide them. Yet, this does not seem to be 38 General training on dealing with the mediathe case. In most companies, there continues to Proactive efforts by press officebe an assumption that the chief executive will to connect me with the media 35perform the lion’s share of media communications, Day-to-day support from press 30 office on dealing with the mediaand so should be the individual to whom the 26vast majority of attention from the corporate Crisis management trainingcommunications department should be directed. Specific training on individual media channels (e.g., television) 23CFOs, it seems, are not given anything like the 8 None of the abovesame degree of support. More broadly, CFOs and their communications teams should spendOnly 38% of respondents say that they receive briefings from the time analyzing who would be the most relevant journalists for theirpress office or a media training company before major company, understanding what will be of most interest to them, andannouncements (see chart 8). This seems very low given the making proactive approaches to a targeted group in order to buildimportance of this opportunity — and the potential for it to go long-term relationships. Among CFOs questioned for this research,wrong. Mr. Harvey recommends that, before any major interview, only 23% currently do this (see chart 9). “All contacts with the mediathe CFO should sit down with the corporate communications team are valuable because it gets you known and you begin to know them,”to work out how they will approach it. “The CFO needs to be clear says Mr. Harvey. “The key is understanding what the journalist isabout the objectives of any important media appearance,” he looking for so that the relationship can provide mutual benefit.”explains. “He or she should work with the communications teamto identify the two or three central issues that they want to As well as targeting selected media contacts, CFOs may alsoconvey. And, if at the end of it, they get two out of three across, consider proactively building relationships with analysts and industrythen they’ve done pretty well.” commentators trusted by those media contacts. As one crisis management expert commented in a recent Ernst Young report2 on crisis communications for audit committee members: “Trusted analysts or commentators ... are especially important for the general media, which doesn’t dedicate much resource to following business;2 risis communications: InSights for European Audit Committee Members, Ernst Young, C instead, they rely on quotes from these experts or analysts.” October 2010. Back seat or center stage? CFOs and the media 17
  20. 20. Chart 9 : Percentage of respondents who strongly agree or agree General training for CFOs on dealing with the media also seems towith the following statements be the exception rather than the norm, with just 38% of respondents saying that their company has offered this. But theI need to be able to handle regular communications 11 problem here may be lack of demand as much as lack of supply. with the media on financial topics such as results but any other issues are handled by the CEO 41 Less than one-third of respondents think that more training would With the 24/7 news culture and a wider range of be helpful, which suggests that most CFOs do not think they need it. news outlets, CFOs face a bigger challenge 5 in communicating with the media than 41 In other words, CFOs may be short sighted about the risks they did 10 years ago involved with speaking to the media. Many senior finance I think media is one of the most important of 10 professionals will be used to dealing with a range of stakeholders, my stakeholders because of its significance as a channel to other stakeholders 28 including analysts, rating agencies and shareholders. But these Disclosure rules make communicating with the skills do not translate directly into an ability to handle the media 5 media particularly difficult for CFOs because of effectively. “CFOs are generally pretty well rehearsed at dealing the personal and organizational risk associated 32 with non-compliance with the media and other stakeholders when presenting annual 6 results and have usually put themselves through the hoops to I work to build relationships with key journalists/news outlets make sure that, when they do stand up, they get it right,” says 20 John Waples, UK Managing Director of Financial Dynamics, a I have difficulty balancing my communications 2 corporate communications consultancy, and a former Business with the media with my responsibilities to other stakeholders, such as investors 12 Editor of the Sunday Times. “But they’re not so good at sitting down and having a more open, general discussion with journalistsI am uncomfortable dealing with the media because 0 I am uncertain about what the standards or at understanding what the media wants.” of compliance are for disclosure requirements 13 Strongly agree Agree18 Back seat or center stage? CFOs and the media
  21. 21. “ ou may be the best pilot Y or the best CFO in the world, but there is still value in going through a simulation of a difficult and unpleasant task in a safe environment.”Mr. Carver likens the CFO to an airline pilot, who may be highly Although preparing for the worst is undoubtedly necessary, it isexperienced, but who still needs to spend time in a flight important to bear in mind that media communications is first andsimulator to ensure that he can respond to an emergency in the foremost an opportunity, not a threat. “All too often, CFOs comeair. In a similar way, CFOs need to prepare for difficult situations out of a studio and think that it went well because they managed— a crisis, an unexpectedly bad set of financial results, or an to stay out of trouble,” says Mr. Harvey. “But that is not a successunexpected angle of enquiry, for example — so that they know in my view. What’s really happened is that they have failed to takewhat to expect. “You may be the best pilot or the best CFO in the advantage of an opportunity that could have snowballed.”world, but there is still value in going through a simulation of adifficult and unpleasant task in a safe environment,” saysMr. Carver. Mr. Harvey also emphasizes the need for investment intraining. “There is no real substitute for real experience, but if yougo through a training course and do a series of really practicalexercises with experienced journalists, you’re going to get a prettygood idea of what it feels like. Training is vital not just in terms ofwarning people what it would be like, but boosting theirconfidence if they have a lack, and conversely, punching througharrogance if they are too far the other way.” Back seat or center stage? CFOs and the media 19
  22. 22. Emerging from the wings Media engagement beyond financial reporting and print media — the reported comfort zone of those surveyed — is likely to be an increasing reality for a growing number of CFOs. At a time when stakeholders are looking for business personalities whom they can trust, CFOs have a real opportunity to put themselves forward. Their unique perspective over the business, their fact-based approach and their position as purveyors of the truth make them a valuable — and often underutilized — asset in a media context. While it may be true that CFOs may be unlikely to replace the CEO in the media spotlight, they are definitely emerging from the wings. The challenge is to create the support infrastructure that will enable them to take on this role with confidence and aplomb.20 Back seat or center stage? CFOs and the media
  23. 23. Respondent demographicsThe following charts show the demographic make up of the 260 CFOs we surveyed.Title of respondents (percentage) Global annual revenue of organization represented (percentage) 42 Group CFO US$500m-US$1bDeputy CFO 27 17 US$1b-US$2b 40 30 US$2b-US$10b 11 US$10b or more 33 Divisional CFOGeographical location of respondents (percentage) Other titles This first edition of The Master CFO Series will be followed by Western Europe 74 others in a collection which will provide insight on the events and experiences which CFOs encounter as part of their role. India 13 Additional titles, which accompany this collection, includeMiddle East and Africa 10 The DNA of the CFO (July 2010) and Future Finance Leaders (Q1 2011) Eastern Europe 3 For further information on these titles, and our program of investment in CFOs across Europe, the Middle East, India and Africa (EMEIA), please contact: Emma Dowding Director, CFO program EMEIA Tel: +44 (0)20 7980 0152 Email: edowding@uk.ey.com
  24. 24. Ernst YoungAssurance | Tax | Transactions | AdvisoryAbout Ernst YoungErnst Young is a global leader in assurance, tax,transaction and advisory services. Worldwide, our141,000 people are united by our shared valuesand an unwavering commitment to quality. Wemake a difference by helping our people, our clientsand our wider communities achieve their potential.Ernst Young refers to the global organizationof member firms of Ernst  Young GlobalLimited, each of which is a separate legal entity.Ernst  Young Global Limited, a UK company limitedby guarantee, does not provide services to clients.For more information about our organization,please visit www.ey.com.© 2010 EYGM Limited.All Rights Reserved.EYG no. AU0672 In line with Ernst Young’s commitment to minimize its impact on the environment, this document has been printed on paper with ahigh recycled content.This publication contains information in summary form and istherefore intended for general guidance only. It is not intended tobe a substitute for detailed research or the exercise of professionaljudgment. Neither EYGM Limited nor any other member of the globalErnst  Young organization can accept any responsibility for lossoccasioned to any person acting or refraining from action as a resultof any material in this publication. On any specific matter, referenceshould be made to the appropriate advisor.The views of third parties set out in this publication are notnecessarily the views of the global Ernst Young organization or itsmember firms. Moreover, they should be seen in the context of thetime they were made.

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