5 Important Investor Communication Tips for CFOs

When you hold a title that’s as important as CFO (Chief Financial Officer), while it is certainly a privilege, it is also a huge responsibility, too. That’s because you are the main person that everyone will be looking to make sure that the financial affairs of the company or institution are kept intact. After all, no matter how great a product or service may be, when the finances are not in order, chaos, on some level, ensues.

That’s why it’s so important for CFOs to do all that they can to maintain healthy and consistent communication with their company’s investors. This establishes trust that leads to confidence, which leads to overall success for all parties involved.

So if you happen to be a CFO and you’d like a few tips on things that you can do that will help to cultivate a healthy relationship with your company’s investors, here are five great ones:

Know when to share the market. It’s always easy to share good news about the financial state of a business. It’s when the information that you have isn’t so great that things can get to be a bit harder to convey. So if you’re wondering when it’s the best time to share bad news about the market, here’s a relatively good rule of thumb: If you have 3-5 investors who have basically asked you the same question, it’s time to share the answer on a broader scale.

Discuss when things don’t go as you planned. Although it would certainly be nice if mistakes were never made within a company, that’s not realistic. And here’s the thing, when investors never hear a report of how things haven’t been going as planned, they tend to get pretty suspicious. That’s why it almost always works in your favor to be as transparent as possible. You don’t have to divulge every single detail, but do make sure that it’s enough to where they won’t keep wondering if there’s more that they should know.

Develop strong relationships with your investors. Investors are an essential part of your company. Therefore, it’s vital that you are proactive when it comes to cultivating strong relationships with them. Schedule quarterly meetings. Host webinars from time to time. Send out newsletters with relevant updates. All of these things can open up the lines of communication and make your investors feel like a priority.

Be honest about your sources of funding. If you were to ask someone who works for a company like Broadridge Financial Solutions about something else that, as a CFO, you should do to develop communication with your investors, something that they might tell you is that it’s a good idea to share your sources of funding for the company. If you choose not to disclose that information, it could send a message to investors that you’re not very trustworthy. So definitely make sure that you do.

Don’t be big on surprises. Coming up with the kinds of strategies that will help to grow your company is something that investors are usually supportive of, especially when they are told about it before it’s officially implemented. That’s why the final tip is to not make it a practice of surprising your investors with big changes that you plan on making. You want them to be at ease as much as possible. Keeping them in the loop, step-by-step, will help to achieve that goal.