Appendix Four

Start with what the question is not. It is not an accusation, and it has not been put as one: it is two questions whose answers are in your own appendix and your own file. The room will decide what it thinks of the paper by the numbers. It will decide what it thinks of you by the next thirty seconds.

A is the answer eighteen years of pride reaches for, and it is technically true — the netting is disclosed, and figures are often shown that way. It is also beside the point. The committee is not asking whether you hid anything. It is asking how much working capital Fernbrook needs, and on the gross view the answer is more than the paper asked for. Win the argument about disclosure and you have defended a facility that will be drawn short of the real need within the year, with your name on the paper. C takes the one number the committee now knows is wrong and asks it to vote anyway, leaving the conditions to be written by someone who was not in the room. D withdraws a paper you still believe in and gives the client a sentence — “the committee had concerns” — that makes the bank sound arbitrary and hides that the concern is one you could have answered.

The senior banker in the presenter's chair chooses B, and does it before the chair has to ask twice. “That's the right question. Gross of the advances, the need is larger than this paper shows, and I don't yet know the return experience in the new regions. I'd like to bring back a resized facility, with a borrowing base that leaves out the receivables customers have already paid for, and the new-region growth funded as it sells through.” Nobody in the room will remember that the paper needed correcting. They will remember who corrected it — and the junior member will remember that appendix four gets read, which is a lesson worth more to your committee than one clean paper.

Then the call tonight, which is the part of the job the committee never sees. Fernbrook's owner does not need to hear about netting. They need to hear that the bank likes the business, wants to fund more of its working capital rather than less, and wants to fund it in the shape the business actually uses cash — and what that means for them this month. A decision made in a committee room reaches a client only as whatever the presenter says on the phone. Say the true version, in the client's words.

Credibility is not never needing correction. It is taking the correction in the room, and carrying the right answer out of it.