As CFO of an East Coast insurance company, Dennis Bandish never could find the time to schmooze with other financial executives just for the sake of making connections. Then he found himself out of work four years ago. Without a lot of doors to knock on, he languished for 14 months before landing his current position as CFO of Michigan Millers Insurance Co. through a former colleague. The lesson? “I made a commitment to myself to start actively networking,” says Bandish, “and to not let myself get so out of touch again.”
Job-hunting is only one reason financial executives are staying in touch these days, however. As their role becomes increasingly complex, peer gatherings have become a place to pool expertise in such areas as human resources and technology management, get the inside track on regulatory compliance, and bounce new ideas around before presenting them to the CEO.
Judging by the growth in national finance-focused associations, social capital is becoming a popular investment. Last year, Financial Executives International boasted its largest membership gain in five years, according to FEI director of marketing Chris Allen. Meanwhile, the Association for Financial Professionals (formerly the Treasury Management Association) says its ranks of senior financial executives swelled by 15 percent last year. In addition, the Financial Executives Networking Group (FENG), sponsored by the AFP, is growing by 5 percent a month, reports chairman Matt Bud.
And these numbers don’t capture the many informal local groups that meet over breakfast or lunch to help financial executives in companies of a similar size or within a particular industry digest hot topics. In Boston, for example, financial executives from a group of fast-growing New Economy firms meet to see how group members are building investor relations departments in the wake of Reg FD. In Silicon Valley, CFOs of venture-capital firms can call on the Venture Capital Bean Counters (VCBC) to find out about everything from international investing perils to how often they should draw capital from partners. “There’s no one else in the firm who does what I do; I often have to look outside to get answers to my questions,” says VCBC member and Blueprint Ventures CFO Ashley Read.
Measuring the benefits of networking is difficult, but many say the payoff is evident in the consultants they haven’t hired, and the mistakes they haven’t made. And in his book Achieving Success Through Social Capital, Wayne E. Baker has gathered evidence that broad networking helps professionals keep their jobs, get promoted faster, and, in some cases, secure better rates in the capital markets. “People with the right networks,” he explains, “know where to get information when they need it.”
Access to such information is especially critical when a big business change comes down the pike. James J. Abel, CFO of electrical supply maker Lamson & Sessions Co., and a 20-year member of the FEI, says having access to the FEI’s panel discussions on the SEC’s blue-ribbon committee on auditor independence helped him “see what the SEC’s real intent was.” The information sessions from the Big Five accounting firms weren’t nearly as useful, he says, because “they didn’t have the same feel as talking with peers who are [facing] the same issues in their companies.”