CEO, Board Liability

Consider this phrase:

“Non-financial managers can no longer afford to be non-financial.”

When I first said that to a workshop audience a few years ago, some took it as a pitch for my executive finance coaching services.

Then a series of events hit the news wires:

• Bernie Ebbers was convicted despite claiming he knew little about WorldCom’s finances;
• Ken Lay was indicted following the fall of Enron, although he claimed little knowledge and no blame for what happened;
• Arthur Anderson collapsed under the weight of Enron and other “errors of judgment;”
• Sarbanes-Oxley sailed through congress, imposing new requirements on CEOs.

Now my sound byte sounds almost prophetic. Today as always, most CEOs rely on their financial advisors to know the details, to interpret the indicators, and to keep them informed. In many cases CEOs simply don’t know enough about the financial underpinnings of their own companies. Often they are challenged by an inability to effectively read between the lines of their own financial reports. As a result, they live with an awesome  potential liability.

Yet, despite the risk, many CEOs do not want to freely acknowledge their financial shortcomings to their staff, their boards, not even to their CFOs. Or maybe especially to their boards and CFOs.

This risky scenario is being played out in corporations large and small across the country.  To minimize your risk you must develop your knowledge and skills in the financial implications of your decisions.

For a completely confidential discussion of CEO and Board liabilities, please call me at my office (310) 645-1091 or my cell phone (310)720-1091.

We’ll know in just a few minutes if executive finance coaching can help you to increase your effectiveness while reducing your personal liability for the financial matters affecting your company.