📬 Talking (Office) Politics: An Exercise in Influencing People

Spend smarter, move faster

Tired of choosing between tighter spend controls and faster execution? With Brex, you can break the tradeoff. Get the smartest corporate cards, banking, expense management, and travel — all in one place. You’ll save money and automate busywork while your competition is still reconciling last month's expenses. See how top CFOs do it.

Get the guide

Antonis from Athens, Greece asked:

Climbing the CFO ladder, there are various challenges one needs to overcome. In corporate, you have to fight the politics and play the power game sometimes, while in a startup, you may encounter amateur management with communication difficulties as a finance person.

What's your advice for an unconventional guy who doesn't feel he wants to play corporate power games while needing a minimum of common sense on the management side?

Antonis,

Corporate politics can be unpleasant. I’ve got a series coming later in the year on the topic.

But they are also unavoidable.

I was the same in my early career, I was vocal in my distaste for any kind of corporate politics. I remember proudly telling this to the VP of Finance I worked for (who was a few levels above me). I expected him to be impressed.

He wasn’t…

He told me that what I was describing as politics were, in fact, just exercises in influencing people. And if I wanted to be a finance leader, I had to learn how to influence people.

Corporations are big, complex beasts, and not everyone thinks the same way all the time. But strong leadership finds a way to bind a team around the right answer.

So, learning how to build those skills is important.

Don’t misunderstand me. Corporate politics are real. As real as a year-end deadline…

But they can be hard to separate from the ‘real work’ of influence and aligning people until you get in them.

So, here is the approach I have always taken.

Approach everything like an exercise in improving your ability to influence people. Relish the challenge.

Treat people fairly and openly. Most people will reciprocate if they can see that’s how you work.

Always show that you are working to do the right thing for the business (the ‘higher purpose’).

Do these things consistently, and you should find that politics either end up pointing at a different place in the organization or dissolve altogether. It can be quite disarming when someone is doing a great job and doing it the right way. It removes the excuse for others. It makes their silly games look shallow.

This method worked for me until I got to the boardroom, at which point I found I did need a bit more of an edge. But you can worry about that later.

Best of luck, Antonis, and thanks for the question.

AR Master from Riyadh, Saudi Arabia asked:

We are a service industry company providing supply chain solutions, and as part of our business model, we maintain significant accounts receivable from our B2B customers. I would like to understand how to determine the maximum credit we can extend to our customers based on our own balance sheet.

Specifically, I would appreciate insights on:

1. Whether there is a formula or financial ratio that helps determine the maximum credit exposure we can take while maintaining financial stability.

2. Whether asset-liability matching, as used by banks, can be applied in this context to manage credit risk effectively.

3. Industry best practices, key financial metrics, or models that can guide this decision.

4. If we are part of a larger group, how should the group determine credit exposures for each subsidiary based on their respective balance sheets?

Looking forward to your expertise on this matter.

Hey AR Master - thanks for the question. Big topic - and it plays right into working capital and cash flow. But I’ll resist the temptation to get on my working capital soap box and focus purely on the credit risk part of your question.

Credit portfolio risk comes in three flavors:

Customer concentration: How much of your receivables are tied up with your top 5 or 10 customers?

Individual customer profile: If your ledger is full of cash-rich giants like Saudi Aramco, you can probably afford to take more credit risk. Even if it’s concentrated.

Covariance: Are your customers all in the same sector or geography? If so, your risk is amplified in a downturn.

This gives you a sense of your portfolio’s resilience and helps define your credit risk appetite.

And how should you quantify that risk appetite?

There’s no universal formula, but here’s one I like: Set your total receivables limit as a percentage of liquidity headroom (cash + undrawn lines).

This frames the question as: “If X% of AR doesn’t pay, can we absorb the hit within our own liquidity buffer?” It’s simple, stress-testable, and CFO-friendly.

Onto part 2 of your question, while ALM (asset-liability matching) is more of a banking tool, the principle still applies: Make sure you’re collecting your cash before your liabilities fall due.

If your DSO is 60 days and AP is due in 30, you’re funding your receivables, so your credit policy needs to reflect that. Structure your terms and funding accordingly.

Once you’ve set the overall credit risk appetite, the next job is to allocate it smartly:

• Use internal or external credit scoring tools.

• Dynamically adjust limits based on payment performance.

• Set flags for early warning: aging, delayed remittances, sector risk

And then, of course, there is always credit insurance.

Just be careful about relying on credit insurance. My personal experience is that most credit insurers are gutless grifters. They will gladly take your premiums for AAA risks and won’t touch anything with a bit of a hair on it. And they are comfortable moving the goalposts mid-policy, too. There are exceptions (if you find them, hold onto them dearly), but they are exceptions for a reason.

Onto your final question. Being part of a group is a strategic advantage from a credit risk perspective. Don’t limit credit appetite by subsidiary just for the sake of it. That’s a missed opportunity to pool risk and deploy capital more efficiently.

Instead, use intercompany guarantees or centralized treasury support to let subs punch above their weight - as long as you're confident in how the risk is managed and monitored at the group level.

Fun question… thanks!

CFO from Houston asked:

Are CFOs expected to lead M&A activity in an organization?

It depends.

If it’s in your job spec, then yes!

The important thing is that someone is responsible for M&A, and everyone knows who that is. In a highly acquisitive business, you might have a Chief Strategy Officer or President of Corp Dev reporting directly to the CEO.

In others, M&A might be so far off the radar that it doesn’t really matter.

At a minimum, I think it’s important for a business to follow what M&A is happening in their market. That normally means making friends with the investment bankers that specialize in your sector.

And most often, from my experience, this lands on the CFO’s lap, sometimes deliberately. Sometimes by default, because they are assumed to have the skills to deal with M&A.

Some of this can be delegated to the team, of course. But for a material transaction, you will want to own it.

My experience with M&A as CFO is that I typically worked as the ‘deal principal.’ The person leading negotiations. Occasionally, I’d pull in the CEO to help with negotiations, but most often, I liked to run it myself.

In terms of executing the deal (DD and legals), you will need some help. Whether that’s an in-house corp dev/legal team (in a large biz) or, more likely, outside advisors, get the right people around you to make the transaction a success.

But even with that resource, you do need to be the person at the top of it all, coordinating it. Good M&A is about threading the different workstreams together to get a view of risk, valuation, etc.

If this goes wrong, and it’s your neck on the block, make sure it’s because you made an error of judgment despite your best effort. Not because you had no idea what was going on. You’ll learn from the former, you won’t learn from the latter.

Thanks for the question, CFO 🫡

Every week I’ll share a book I loved or found useful.

A few of the biggest stories that every CFO is paying close attention to. This is the section you probably don’t want to see your name in.

CVS Health Taps Brian Newman as CFO

This is a major turnaround job. Am I a bit jealous? Yes.

Acting IRS commissioner plans to resign after data-sharing deal with immigration authorities

Nothing to see here, but this is the third IRS commissioner to resign during the Trump administration.

Accounting Firms Baker Tilly and Moss Adams Near Merger

Private equity has got a fever, and the only prescription is buying more HVAC roll-ups accounting firms.

ICYMI, here are some of my favorite finance/business social media posts from this week. In the words of Kendall Roy, “all bangers, all the time.”:

• If you’re looking to sponsor CFO Secrets Newsletter fill out this form and we’ll be in touch.

• Find amazing accounting talent in places like the Philippines and Latin America in partnership with OnlyExperts (20% off for CFO Secrets readers)

• If you enjoyed today’s content, don’t forget to subscribe.

Let me know what you thought of today’s Mailbag. Just hit reply… I read every message.

ICYMI: In Saturday’s CFO Secrets newsletter, we dove into the importance of storytelling in reporting. You can catch up here.

Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need.