News continues to circulate around Apple’s impending launch of a music streaming service that is set to rival Pandora. Apple already has two major music labels lined up for the launch, with many more poised to join. The anticipation for Apple’s new music service caused Pandora’s stocks to sink even lower. However, Pandora’s Chief Financial Officer Mike Herring says he isn’t worried about Apple’s launch – and places emphasis on the fact that we’re not even sure what Apple’s service will really be like.
Mike Herring’s announcement is a prime example of the pro-active role CFOs can take to boost consumer and investor confidence. With so many rumors surrounding the potential competition from Apple, Pandora’s shares fell 5.5% in a single day, on top of a 15% plunge from the weekend before. CFO Herring assures investors that Pandora will continue refining their services, competing against any and all competitors.
Boosting Investor Confidence Requires Leadership from CFOs
This is not the first time Pandora has experienced shaky stocks thanks to concerns over impending competition. When Google announced it would enter the music streaming business, Pandora’s stocks experienced a similar drop before leveling off. Once Google Play Music All Access was revealed and the differences between it and Pandora became evident, Pandora remained king of the streaming-music industry.
Similar to Mike Herring bolstering Pandora’s position while downplaying any potential competition, Chief Financial Officers should make investor confidence one of their prime concerns. One of the ways to do this is to make investor confidence a topic during board meetings on an annual basis. CFOs should lead the discussion within the general counsel and investor-relations team to inspire confidence and suggest strategies that can be employed to keep it strong or improve it.
Furthermore, any external audits should also be the concern of the CFO. The audit committee and CFO must formally assess the experience and competence of the audit team. Alongside the CFO, external auditors, management, and the internal audit team must remain in close relationships to remain effective, yet avoid being confrontational. By aggressively monitoring audits while seeking out investor concerns, CFOs can keep a tight rein on investor confidence.