Healthy Dialogue Curbs Hostile Activism

The rise of investor activism is certainly a controversial topic within many circles and industries. It’s even caused some companies to reshape their CFO searches. The business-development company sector is seeing a rise in activism as stocks fall across many institutions in the market. While boards will almost always agree that they are capable of guiding the company to success, some relationships between shareholders and the company indicate a disconnect between the two.

Shareholder activism tends to reveal this underlying miscommunication between a company and its shareholders. Many of these scenarios can be avoided with a proactive mindset and approach. At my business-development company, Saratoga Investment, we haven’t encountered any issues with shareholder activism to date.

We credit this to maintaining a healthy relationship with our investors that centers on proactive communication and mutual respect — ideally negating the need for escalation on the shareholders’ part, which can often feel hostile to a board and its management. When partnering in this type of communication with positive results and actions supporting various parties different interests, all parties can likely avoid escalating issues to a point of contentiousness. Instead, we can come together and discuss the best course possible for everyone.

A continued dialogue is essential to the success of a business-development company and the relationship with its investors. Our primary goals are maintaining quality through disciplined underwriting, keeping liquidity strong, and generating meaningful returns for our shareholders.

In doing so, our shareholders are more likely to see the short- and long-term benefit of investing with Saratoga and understand our direction. While short-term results have produced solid earnings, we discuss and remain focused on long-term returns. That’s why we suggest holding regular meetings to update investors of any pressing news or developments in the company and/or sector as disclosed in our public releases and earnings calls.

By laying out these goals and agendas during these releases, Saratoga maintains transparency with our investors. Having follow-up calls with us as requested allows them to voice ideas, questions, and concerns that may arise so that we may address them in a timely fashion. Certainly listening is key, but considering their insights is just as vital. You must listen and consider investor input whenever possible. These people are investing in your company. They deserve to be heard. You never know when some excellent ideas will come forth.

Even if the company opts to go in a different direction, the shareholders and the board can look back to see the healthy dialogue that led to this point. Sometimes more rounds of conversation will arise, but if the reasons and objectives are clearly laid out by the board, general understanding and respect is more likely to be reached.

We try to keep our fingers on the pulse of our environment, market, and the views of our various constituents, and take a proactive approach to communicating our successes. Thankfully, we’ve been able to avoid any significant setbacks in recent quarters, but negatives need to be communicated when they occur.

Even when negative news arises, there is an opportunity for proactive communication that leads to an expression of solutions and strategies. In some cases, this isn’t possible and the news must simply be delivered. But regardless of the scenario, healthy talks with investors are almost assuredly going to lessen tensions that could otherwise escalate and lead to hostile shareholder activism.

This post was originally published on CFO.com

 

Rethinking Your Approach to Shareholder Engagement

Does your company’s interaction with shareholders feel more like an obligation than an opportunity? If so, it might be time to consider a different approach.

If you’re curious why this happens, think about the relationship between your business and its investors. Is there a high level of confusion or contention between investors and the board? Is the business’s approach to communication seen as a formality? Is your engagement usually conducted strictly during times of crises?

In recent years, articles and interviews with executives discussing shareholder engagement appear to be on the rise, indicating an uptick in awareness. Still, as a whole, businesses could stand to improve their outreach.

At Saratoga Investment Corp., we place a high emphasis on shareholder engagement and outreach. The reason is simple: proper investor outreach is mutually beneficial. By keeping your investors further informed on business proceedings, you give them a greater sense of immersion and connection to their investment. When investments continue to perform, investors are less likely to consider pulling their money from the venture. They may even opt to invest further.

In short, if your company isn’t thinking like a shareholder activist, maybe it’s time to consider a paradigm shift when it comes to your outreach. As Vanguard chairman and CEO F. William McNabb III notes, thinking like an activist helps your company in the very best sense. He elaborates, “Healthy and vibrant boards think like an activist in the very best sense. They ask:

  • Where should we be pushing harder or taking costs out? What are the management team’s blind spots?
  • What are the board’s blind spots?
  • And how do we correct that? Some boards bring in sell-side analysts that have a ‘sell’ on the company to tell them what they’re missing.”

By thinking like an activist, your company can become proactive in ways that a shareholder couldn’t possibly from merely an investment standpoint. Now the business places itself in an advantageous position. Imagine the next time you communicate to your shareholders that you did notice areas of improvement. The issue was resolved and now the business is reporting the positive improvement to its investors.

That sort of engagement is bound to produce positive sentiment, don’t you think?

If your business effectively communicates its financial performance, that’s excellent, but it’s far from all you can do. To expand your outreach efforts, consider expanding the discussion to include strategy, risk assessments, and other topics that are important to investors. By discussing these, you give investors a higher level of transparency, which has a high likelihood of translating into a higher level of confidence and trust for your business.

Even if your business is working on producing the numbers your investors want to see, an in-depth engagement approach provides investors with a deeper level of understanding of your business. By granting access to more pertinent information, the investor is able to understand their investment on a deeper level — a desire you might have heard more about since the financial crisis.

From dedicated teams to a few tweaks, more of today’s businesses are listening to the opportunities and benefits that come with improved shareholder engagement. If your company hasn’t done so, it’s high time to at least consider adapting your current approach. In the end, all parties could reap the benefits.

This post was originally published on CFO.com

What Millennials Should Know About BDCs

Adults under 30 years of age — the millennial generation — are faring well financially and enjoying their earnings, but only 26 percent report that they own any stock, according to a recent Bankrate survey.

The biggest reason for ignoring the stock portfolio is the misconception that millennials do not have enough money to invest. The second reason for neglecting to invest is not knowing anything about stocks.

A lack of trust in the market is also preventing many from believing investing is a viable way to save for the future. According to a Capital One Investing survey released by CNNMoney, 93 percent of millennials reported both a distrust of the market and a lack of investing knowledge.

Bottom line: Millennials are fearful and not knowledgeable enough to invest.

Fortunately, millennials have many resources at their disposal to learn about investing basics and pick out a few high-performing investments. Online wealth management firms and DIY brokerages are some good starting points. These resources and tools can help younger investors learn about investing strategies and create a starter portfolio that carries them through their working years. Learning about business development company (BDC) investments can be extremely valuable for a young investor who wants to build or diversify his or her portfolio.

How Millennials Approach Investing

In its “Millennials and Money” white paper, Merrill Lynch revealed the results of its Young High Net Worth Insights Survey, which shows 65 percent of young investors take the same approach as their parents. These investors are independent and skeptical, which means they may be more inclined to make carefully researched choices and be somewhat conservative in their approach. This generation makes thoughtful spending decisions and may not be so eager to indulge in luxury purchases or seek out high-risk stock trading activities.

BDCs might be the ideal option for millennials who want to diversify with minimal risk and also get the highest returns on their portfolio. Here are some important things millennials should know about BDCs:

Saratoga Investment Corp.’s, recent Q3 FY 16 earnings report

Saratoga Investment Corp.’s, recent Q3 FY 16 earnings report

Getting Started with BDC Investments

A BDC is a publicly registered company that provides financing to small and mid-sized businesses. BDCs fund other companies and answers to their own board of directors. BDCs were created by Congress in 1980 as an amendment to the Investment Company Act of 1940. These companies represent a very transparent portfolio of lines which are open for public trading without any restrictions.

People who choose to invest in BDCs are, therefore, investing in the performance of an company. BDCS can pay high dividends because they take on risks in the process of buying stock in various companies. Since their own portfolios are so diverse, well managed BDCs can show a steady track record of success, which in turn makes them even more appealing to individuals looking to build a portfolio.

Why BDCs Are So Attractive

One of the biggest reasons BDCs are so attractive to millennials is because they provide for diversification of funds. Instead of investing in a single stock or company, the investment is spread across dozens or hundreds of small businesses, which means the risk level is similar to that of a mutual fund. Young investors seeking out lower-risk opportunities may find BDCs to be among the most attractive options for their portfolio. For an idea of what this diversification looks like, take a look at this graph from my company, Saratoga Investment Corp. This is from our recent Q3 FY Earnings Report:

Another benefit of BDCs is the tax advantage. Like real estate investment trusts (REITs), BDCs are not taxed at the corporate level under certain conditions, which means they provide investors a higher dividend yields than other investments. This is one of the reasons why BDCs work so well in retirement accounts — when a shareholder holds a BDC in an IRA, they enjoy the benefit of tax-exempt gains and cash distributions.

Identifying the Right BDCs

Millennials exploring the idea of investing in BDCs need to do some due diligence to make informed decisions. Since these companies are transparent about their schedule of investments, it’s a good idea to review this information closely and focus on BDCs that are investing in companies with a positive cash flow. BDCs investing in fast-growing companies and market leaders are more likely to provide investors with high returns.

Young investors do not need to shy away from the prospect of investing when they arm themselves with valuable knowledge about stock trading and learn about attractive investment opportunities such as BDCs. With careful planning and an accurate assessment of risk, many millennials will find BDC investments to be an extremely valuable addition to their portfolio.

This post was originally published  on ChrisOberbeck.com

Saratoga Investment Corp. to Report Fiscal Year End and Fourth Quarter 2016 Financial Results and Hold Conference Call

NEW YORK, April 19, 2016 – Saratoga Investment Corp. (NYSE:SAR), a business development company, will report its financial results for the fiscal year and quarter ended February 29, 2016 on May 17, 2016, after market close. A conference call to discuss the financial results will be held on May 18, 2016. Details for the conference call are provided below.

Who:

Christian L. Oberbeck, Chief Executive Officer
Michael J. Grisius, President and Chief Investment Officer
Henri J. Steenkamp, Chief Financial Officer

When:

Wednesday, May 18, 2016
10:00 a.m. Eastern Time (ET)

How:

Call: Interested parties may participate by dialing
(877) 312-9208 (U.S. and Canada) or (678) 224-7872 (outside U.S. and Canada).
A replay of the call will be available from 1:00 p.m. ET on
Wednesday, May 18, 2016 through 1:00 p.m. ET on Wednesday,
May 25, 2016 by dialing (855) 859 -2056 (U.S. and Canada) or
(404) 537-3406 (outside U.S. and Canada), passcode for both replay numbers: 94018191.

Webcast:
Interested parties may access a simultaneous webcast of the call and find the FY 2016 presentation by going to the “Events & Presentations” section of Saratoga Investment Corp.’s investor relations website, http://www.saratogainvestmentcorp.com/investor.html

Information:
Saratoga Investment Corp.’s Form 10-K for the fiscal year ended February 29, 2016 will be filed on May 17, 2016 with the Securities and Exchange Commission.

How to Maintain Healthy Board Relationships

Your Board of Directors are a group of expert insiders offering a unique set of talents, expertise, and insights. Maintaining healthy relationships among team members is critical to the success of your company. There are several things you can do to ensure all parties stay on good terms with each other and are eager to contribute. Setting healthy boundaries, maximizing each member’s strengths and coordinating productive meetings is part of the process.

Here are some of the most effective ways to maintain healthy board relationships:

Maximize Available Time

Whether you’re scheduling a one-hour meeting to introduce a new idea or a longer meeting during a product launch, encourage attendees to show up on time and confirm their attendance at least a week in advance. This will help board members plan their schedules around the meeting and reduce the risk of delays on meeting day. If you are preparing a slideshow or a formal speech, make sure all materials are ready in advance, and preferably provided to them so that they can prepare.

Inform Your Board Members

As the head of your company, you know your company better than anyone. Your job is to inform board members of the risks, challenges, threats, and opportunities as they relate to your company and the market as a whole. Ensuring that board members know these factors will help them to do their job more effectively.

Slides can be powerful visual tools that can illustrate these points during a board meeting. Consider creating slideshows to present materials, charts and graphs, and then provide a copy of the presentation for attendees to review later. Graphical presentations are always more powerful than lots of words.

Set Management Boundaries

Board members provide valuable insights and make recommendations on various company activities. Their primary objectives should be to solve major problems and find solutions—not to take on management roles. Encourage them to share their resources and participate in meetings. Make these tasks a priority during and after meetings, providing opportunities for board members to communicate their ideas and insights at every opportunity. This way, they will feel less obligated to take on management tasks and can provide more value to the company as a whole.

Handle Disagreements Effectively

Disagreements will arise but the board must focus on resolving the issue together. Encourage board members to state the issue clearly during a meeting and maintain respectful relations with other members as they work on solving a problem. Consider bringing in a third-party mediator to resolve conflicts or provide independent perspectives, but only if necessary.

Adhere to a Reporting Schedule

Make sure everyone is aware of what is going on and what key decisions are being made during all meetings by summarizing conversations in a meeting and creating reports on any actions taken, or to be taken. Make sure all board members receive this report shortly after a meeting so everyone stays up to date. This could take the form of a comprehensive summary of 10 to 20 pages, or a simple one-page outline of discussions and action steps agreed upon. This report should be distributed to attendees within a week of the meeting.

At the end of the day, it’s all about results. You need to be proactive in order to maintain healthy board relationships and coordinate productive board meetings through business challenges, growth phases, and when making key business decisions. Use these tips to maximize meeting times and make full use of your board member’s expertise to help move your business forward.

How to Stay Up to Date in the BDC Sector

How to Stay Up to Date in the BDC Sector

The business development company sector is a fast evolving facet of the financial marketplace. It is imperative that you stay abreast of the news, or you could fall behind. As a member of the board, and CFOs specifically, you can’t miss the latest comings and goings. If you do, you are not only disserving yourself, you are stunting the performance of your BDC as a whole.

How does one stay up on the latest news while juggling the daily ebb and flow of the company?

To best position myself and Saratoga Investment Corp., I employ key initiatives that provide me the time to catch up on current events without any work falling behind. This includes placing a significant level of investment on emerging talent, and networking on behalf of myself and the company.

If you’re finding yourself having trouble keeping up on the news, try these measures to improve your BDC acumen:

No “I” in Team

If you aren’t relying on your team, it’s high time to start. Your team is vital not only to the success of your BDC’s operations. It is vital to taking some work off your plate so you can focus on the road ahead. With a bit of time freed up, you can now focus on the market, accounting and regulatory news and determine how these developments factor into your plans.

Use your leadership to delegate some responsibilities. This is perfectly acceptable as long as you aren’t passing off work that requires a CFO’s particular insight. A good leader knows what their team can take on. Even if they aren’t sure, this can serve as a great low-risk opportunity to find out. You aren’t asking the world from them. Rather, you are asking them to take on some higher level responsibilities while you focus on the development of the brand and industry. It provides those teammates with career-building experience while you get to focus on other areas of need.

If you aren’t relying on your team, I can’t stress enough the need to do so. You need to have time to focus on the ‘bigger picture’ items.

In doing so, it leads me to my next point:

Developing Talent

By relying on the team to accomplish some duties, you not only afford yourself the time to stay up to date on the sector; you invest in the future of your company. You send a clear message to those that support you that your BDC is invested in their professional growth. This level of investment often fosters a culture of go-getters and high achievers. With this mentality firmly in place at your BDC, you can expect to see above and beyond performances from your team.

Not only does this help distinguish rising talent, you begin to pinpoint the level of investment each associate needs to make that next step in their career. These individuals are likely to further immerse themselves in the sector as well. Now, it’s not just the CFO staying informed of the recent news. Your entire team is on board. Just in case something slips through the cracks, your support team is just as wise to industry developments. This sort of all hands on deck mentality serves on countless levels. It may take a bit of your time early on, but it will pay dividends for you in short work.

Every Quarter Counts

Quarterly earnings calls offer you the chance to see the face of the industry from both a micro and macro viewpoint. From individual BDCs to the larger macro environemtn, each call can shed new light on the shape of the sector to come. You’ll likely be running your own call, so staying up to date there should be second nature. But don’t forget to track the market and individual BDCs as well.

Leave no stone unturned when it comes to fact finding.

Networking

Meet and greet functions, conferences and roundtables can benefit you on a variety of levels. By holding your own, you not only introduce your BDC to a captive audience; you also get to show off yourself. At these events, you can field questions asked by investors, peers and the media. In doing so, you can tout the performance and potential of your BDC. Additionally, you can field questions that let you know what’s on the mind of your peers in the market.

However you approach these gatherings, you provide your BDC ample opportunities to further get its name out to key individuals in your sector. If you leave your audience with the right impression, you could even come away with good resources to help you keep up on the latest news.

Reliable Sources

The people you meet at events and other occasions can become integral outside sources of information. Instead of remaining within your BDC’s pipeline, an outside resource–think a contact at an accounting firm–can minimally engage you to get through complex issues. These people often are on the cutting edge of the market. They have key details and information that they can share with you.

Instead of sourcing all the news yourself, you now have a reliable individual or two that can provide expert insight from an outside-the-BDC mindset.

If you combine some, or ideally all, these tips you are likely to become the BDC that remains ahead of the pack. Your wealth of information will prove beneficial to your company and the investors that trust in your acumen to provide a return on their investment.

Saratoga Investment Corp. Increases Quarterly Dividend to $0.41 per Share

NEW YORK, March 31, 2016 – The Board of Directors at Saratoga Investment Corp. (NYSE:SAR) has declared a quarterly dividend of $0.41 per share for the fiscal quarter ended February 29, 2016, payable on April 27, 2016 to all stockholders of record at the close  of business on April 15, 2016. Shareholders will have the option to receive payment of the dividend in cash, or receive shares of common stock pursuant to the Company’s dividend reinvestment plan.

The Company also further exercised its share repurchase plan during this quarter. In fiscal year 2015, the Company announced the approval of an open market share repurchase plan that  allows it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published financial statements. Last quarter, this share repurchase plan was extended for another year, and increased to 400,000 shares through October 2016. As of March 30, 2016, Saratoga repurchased 37,920 shares at a weighted average price of $14.10 per share under this plan.

“In light of the volatility and challenges facing the BDC market, we are very pleased to continue paying an increasing and healthy quarterly dividend,” said Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment. “Our ability to over-earn our dividend results from the stable and growing income yield generated from our prudently increasing and high quality portfolio. During this past quarter, we have repurchased 37,920 shares demonstrating our commitment to building shareholder value while maintaining adequate capital to leverage market opportunities.”

Mike Grisius, President and Chief Investment Officer, said, “Our financial performance rests on a new deal pipeline that remains productive despite market tightening. We enjoy strategic flexibility in how we source and deploy capital and feel well positioned to face current market conditions.” During the last four quarters, the Company has paid quarterly dividends of $0.27 per share for the quarter ended February 28, 2015, $0.33 per share for the quarter ended May 31, 2015, $0.36 per share for the quarter ended August 31, 2015, $0.40 per share for the quarter ended November 30, 2015, and a special dividend of $1.00 per share in June 2015.

For more information, visit the Saratoga Investment Corp website.

Healthy Dialogue Curbs Hostile Activism

Investors

The rise of investor activism is certainly a controversial topic within many circles and industries. It’s even caused some companies to reshape their CFO searches. The business-development company sector is seeing a rise in activism as stocks fall across many institutions in the market. While boards will almost always agree that they are capable of guiding the company to success, some relationships between shareholders and the company indicate a disconnect between the two.

Shareholder activism tends to reveal this underlying miscommunication between a company and its shareholders. Many of these scenarios can be avoided with a proactive mindset and approach. At my business-development company, Saratoga Investment, we haven’t encountered any issues with shareholder activism to date.

We credit this to maintaining a healthy relationship with our investors that centers on proactive communication and mutual respect — ideally negating the need for escalation on the shareholders’ part, which can often feel hostile to a board and its management. When partnering in this type of communication with positive results and actions supporting various parties different interests, all parties can likely avoid escalating issues to a point of contentiousness. Instead, we can come together and discuss the best course possible for everyone.

A continued dialogue is essential to the success of a business-development company and the relationship with its investors. Our primary goals are maintaining quality through disciplined underwriting, keeping liquidity strong, and generating meaningful returns for our shareholders.

In doing so, our shareholders are more likely to see the short- and long-term benefit of investing with Saratoga and understand our direction. While short-term results have produced solid earnings, we discuss and remain focused on long-term returns. That’s why we suggest holding regular meetings to update investors of any pressing news or developments in the company and/or sector as disclosed in our public releases and earnings calls.

By laying out these goals and agendas during these releases, Saratoga maintains transparency with our investors. Having follow-up calls with us as requested allows them to voice ideas, questions, and concerns that may arise so that we may address them in a timely fashion. Certainly listening is key, but considering their insights is just as vital. You must listen and consider investor input whenever possible. These people are investing in your company. They deserve to be heard. You never know when some excellent ideas will come forth.

Even if the company opts to go in a different direction, the shareholders and the board can look back to see the healthy dialogue that led to this point. Sometimes more rounds of conversation will arise, but if the reasons and objectives are clearly laid out by the board, general understanding and respect is more likely to be reached.

We try to keep our fingers on the pulse of our environment, market, and the views of our various constituents, and take a proactive approach to communicating our successes. Thankfully, we’ve been able to avoid any significant setbacks in recent quarters, but negatives need to be communicated when they occur.

Even when negative news arises, there is an opportunity for proactive communication that leads to an expression of solutions and strategies. In some cases, this isn’t possible and the news must simply be delivered. But regardless of the scenario, healthy talks with investors are almost assuredly going to lessen tensions that could otherwise escalate and lead to hostile shareholder activism.

This article originally appeared on CFO.com

Saratoga Investment's New 3Q Loans: Help/Systems, My Alarm Center

Saratoga Investment Corp Help Systems My Alarm CenterSaratoga Investment Corp. invested a total of $15.3 million in new investments in the recent fiscal quarter, in Help/Systems Holdings and My Alarm Center.

Saratoga increased its investment in Help/Systems Holdings. The expanded investment, as ofNov. 30, comprised a $5 million, 6.25% first-lien term loan due 2019, and a $3 million, 10.5% second-lien term loan due 2020, according to the company’s 10-Q.

Help/Systems Holdings, based in Eden Prairie, Minn. and a subsidiary of HS Group Holdings, provides automation and business productivity software.

Moreover, Saratoga Investment Corp. added a $7.5 million 12% second-lien loan due 2019 to My Alarm Center to its investment portfolio in the recent quarter. My Alarm Center, a portfolio company of Norwest Ventures, provides residential and small commercial security services and home-automation technologies.

My Alarm Center closed a new $50 million second-lien term loan late last year via placement agent Imperial Capital with proceeds earmarked to repay mezzanine debt. In addition, the company’s first-lien term loan was increased by $25 million.

Saratoga’s repayments in the fiscal third quarter ended Nov. 30 totaled $27.9 million, outpacing new investments. New investments picked up after the quarter ended, with Saratoga adding $31.2 million on the back of repayments of $3 million.

“The timing of redemptions and the new rate originations during this quarter were unusual with most redemptions occurring during the quarter, while many new originations occurring following quarter end,” said CEO Christian Oberbeck in an investor call today.

Behind the magnitude of the redemptions is Saratoga’s strategy of pursuing higher-quality investments, which increases the chances of a debt refinancing or company sale, investors heard on the call.

“If you are making good investment selections, you are exposed to higher redemptions. We have experienced that,” said CIO Michael Grisius on the call.

Saratoga Investment has no significant direct exposure to the oil-and-gas industry, with some exposure to the ailing sector through its CLO.

“The lower middle market is the most attractive market segment to deploy capital, and the fundamentals here remain strong, leading to the best risk-adjusted returns, in our view,” Grisius added. 

Could a CFO Run for President?

Abraham-Lincoln

If the current presidential-election polls are any indication, the American people are willing to consider someone beyond a career politician in the White House come 2016. With names like Trump, Carson, and Fiorina topping Republicans polls, and outside-the-box politician Bernie Sanders climbing the Democratic ranks, we could have a drastically different election this time around.

Additionally, business leaders with names like Romney, Perot, and Forbes have leaped into the race in prior years. Mitt Romney’s run, of course, took him to the brink of the presidency.

With those thoughts in mind, consider this: Is it time for a CFO to enter the fray?

Some may scoff at the idea, but the parallels to being a superb president and CFO line up in several key facets. When removing political bias from our analysis, we see that several past presidents exhibited traits that might be similar to those of strong CFOs. When examining what the American people look for in a leader, it becomes clear that the right CFO could, in theory, make waves on either side of the aisle in the right race.

A Moral Compass

The American people have reaffirmed in recent years that they desire a shift back to honest, trustworthy leaders with a track record as such. While it would be hard for anyone to meet the bar set by “Honest Abe” Lincoln and his “almost monomaniac” focus on honesty, as described by his wife Mary Todd, Lincoln’s legacy is a benchmark many leaders will continue to hold in high esteem.

The tribulations Lincoln went through during his presidency obviously dwarf any hardship CFOs face on their most difficult days, but a quality financial officer and leader knows that treating each situation and individual with truth and integrity sets an honest tone for the rest of the interaction.

Lincoln did this even with his staunchest opponents, allowing for resolutions to come about even amid bitter rivalries. Lincoln’s honest pragmatism allowed him to cut past political pleasantries and focus on the pressing tasks at hand. As CFOs, we take this approach as well to tackle difficult issues that often have emotions running high. If we remain honest and moral, the task will be completed as such.

An Analytical Mind


Beyond having a high moral compass, high-quality CFOs analyze situations from all angles. With keen analysis, they can create masterful plans that can only come to fruition through excellent foresight. That same kind of foresight couldn’t be better exemplified than as seen in our first president.

When the world expected the American union to fall after gaining its independence, George Washington took an audacious stance for the time. Considered foolish and radical by global counterparts, Washington stood strong in his belief in the United States. Facing a challenge no nation had before, Washington united a diverse group of people without imposing fear of military or royal rule.

In the 21st century, Washington’s 18th-century views still hold largely intact and are growing globally. Like a true visionary leader, Washington stuck by his beliefs and faith in the people to form a union the world had never seen on such a magnitude. CFOs also strive to hold strong to beliefs when they know a dream is attainable. Even during the darkest times, they can keep the team united in the view of a greater future.

Strength in Unity

Like Washington, America’s greatest leaders stood strong on their convictions, even when the republic didn’t always agree. When it came to Lincoln, his cabinet was a who’s who of political rivals for the president. Not only did Lincoln select the three Republican rivals he beat out for the party’s nomination — William Seward, Salmon Chase, and Edward Bates — he also included Democrat Edwin Stanton. The cabinet would be dubbed the Team of Rivals despite their prowess for progress.

Flash forward about a century to when Dwight Eisenhower demonstrated the power of bipartisanship that led to the United States righting its then-lagging space program. By working across party aisles and with NASA, the program would get back on track and set up the milestones achieved a decade later. While different in circumstances, Lincoln and Eisenhower both display an ability to see past differences for the greater good.

This example is echoed by ideal business leaders, with a CFO often shouldering the heaviest responsibility. By having a view for the future and the greater good, a CFO is often the go-to person in a company to successfully — and fairly — manage these situations.

Comfort Through Effective Communication

Whether in a boardroom or the Oval Office, an ideal leader can communicate with every person, regardless of position or status. While CFOs are adept at addressing boards, investors, and other high-stakes meetings, the president faces off not only with world leaders but with the American people as well.

As an accomplished orator, John F. Kennedy embodied the passion and knowledge it took to galvanize the American people. This was on full display as he urged America to do all it can for its country, as well as inspiring us all to reach for the stars during the Space Race.

When it came to Franklin D. Roosevelt, his fireside chats were as close as the American public could come to having personal interaction with the Commander-in-Chief on a regular basis. Between his 30 chats and inspiring Americans’ belief that “the only thing we have to fear is fear itself,” FDR was an early predecessor for JFK’s ability to inspire and reach audiences.

People-centric Focus

To genuinely and successfully connect with people, a leader needs compassion for everyone that’s part of the process. Whether it be a business, national, or even global dilemma, ideal leaders care for their people above all else. Growing profits and margins is the end game for a CFO and also, to a large degree, for the president, but those that factor humanity into the process tend to do best.

The efforts of Theodore Roosevelt demonstrate this power. Known for taking on big business on behalf of the common man, Roosevelt earned a reputation as a champion of the people. His “speak softly and carry a big stick” approach exemplified ability to be compassionate while swinging hard for what he believed was right for the country. While those in business may not have always agreed with him, the conviction to fight for your constituents and/or colleagues is a trait that today’s thriving companies often seek in their CFOs.

Decisions at Dire Times

All the aforementioned skills that embody the ideal president and CFO would amount to nothing if they weren’t adept at making tough decisions in crucial moments. From Washington to Lincoln to the modern era, every president has faced hurdles of different varieties.

After lowering taxes to ease burdens on individuals and businesses alike, Ronald Reagan and his administration later had to raise taxes to keep the country on track — a very un-Republican measure. Reagan raise taxes in five of his years as president, though he still eased the burden overall. Regardless of whether he was in step with his party’s pathos, Reagan’s ability to make the tough decisions helped him stand out as an inspiring force in the 1980s.

With compassion, knowledge and the ability to make tough decisions in the most dire of situations, CFOs embody the knack to lead this country under the right circumstances. While this is far from an endorsement or call to action for any CFO to throw his or her hat into the fray, it is a point worth considering in the future.

Depending on the outcome of this race, you never know who could be gearing up for 2020.

Originally published on CFO.com

Henri Steenkamp is a finance executive with over 15 years of experience in his field. Steenkamp serves as chief financial officer, treasurer, and chief compliance officer of New York City-based Saratoga Investment Corp (NYSE: SAR) and Saratoga Investment Advisors, LLC.