In a surprise announcement lasting less than five minutes, it was revealed that A.G. Lafley would return to Procter & Gamble Co. as chairman and chief executive of the company. Though P&G is in the midst of major restructuring, chief financial officer Jon Moeller was quick to reassure investors that the ousting of Bob McDonald was not indicative of larger problems. Instead, Moeller stated that McDonald simply decided to retire and that A.G. Lafley was the obvious replacement. As the former CEO, Lafley was the most logical option.
Despite the CEO change, CFO Jon Moeller insists that P&G’s strategy will remain unchanged. Shares were up approximately 4 percent after the announcement, bringing values as high as $82.35. During the announcement, there was no specific reason as to why McDonald was leaving or any further elaboration on P&G’s developing markets. Lafley will be paid a base salary of $2 million as he returns to his former position.
Though CFO Jon Moeller didn’t answer any questions from the press, the pressing question was how long Lafley would last in the position given the fact that he had already left. He’s expected to remain the chief executive during the ongoing succession process as the company looks for a new CEO.
Communication Tips for CFOs
Jon Moeller’s announcement concerning the future of the company and the status of the chief executive is reflective of the increasing responsibility that CFOs are being entrusted with. One of the most noticeable aspects of this scenario was Moeller’s effort to quickly reassure investors and the board that everything is fine despite the change of chief executives. To successfully communicate and reassure important players:
- Be aware of timing. When making an announcement, it’s crucial to know when to disclose certain key pieces of information to the market. Just because you know something internally, it doesn’t necessarily mean the public needs to know.
- Be consistent with investors. It’s a natural temptation to let your guard go down in good times, but it’s important for CFOs to continue building relationships with investors in the good times and the bad. When CFOs continue building relationships when the company is thriving, they effectively establish goodwill.
- Be proactive. Just as CFO Jon Moeller proactively worked to stop investor concerns about the CEO change-over before they even arose, chief financial officers should be proactive in protecting confidence and company image.