How To Hire a CFO
The CFO is the highest-ranking financial professional in the business and carries the responsibility for the fiscal health of the business and its financial/legal compliance. When hiring a CFO, it’s often required they have various finance and accounting qualifications. Due to their position and financial control, many of the reference and legal checks carried out on the CFO are some of the most in-depth. So taking the right precautions and partnering with an executive search firm can make the whole process easier and faster, while reducing risk.
In this guide, I will help you understand the kind of CFO you may need and how to hire a CFO by covering the best practices of the CFO hiring process.
What Does a CFO Do?
The CFO’s responsibilities generally include:
- Building the finance and accounting team
- Monitoring and ensuring the revenues and expenses stay in balance, analyzing businesses and recommending them for mergers and acquisition
- Obtaining funding – getting loans, grants, going public, …
- Helping leadership make decisions using financial analysis, and craft budgets
- Ensuring accuracy in reporting
- Consulting the CEO and Board of directors on the company finances and direction.
In fintech companies CFO’s may also help in technological leadership and also give direction across the company due to their experience in finance and in the industry.
A CFO definitely requires a background in accounting and/or finance, as well as a business background such as a MBA. Usually a designation such as a CPA or equivalent is required.
The financial controller, normally, is a chartered/certified public accountant with a business background, who reports directly to the CFO, and is responsible for robust and compliant business account keeping. In smaller businesses the CFO may act as both.
The CFO is accountable to various local government bodies such as the Securities exchange commission (SEC) in the USA. each country has its own set of regulatory bodies they report too.
Types of CFO
There aren’t any official types of CFO. But it’s important to consider the types of CFO that will be out there which may be better or worse suited for your business in its particular stage of its life cycle. As many CFOs specialize in certain jobs. Such as mergers and acquisitions, cost cutting, scorecard CFOs or bringing a company public.
Being aware of these unique CFOs and their styles is key to understanding what will work best for your company.
Important requirements for CFOs
There is a unique set of authorities in most countries to which a CFO will be accountable. This is why background checks for CFOs are crucial
and should never be overlooked. The fiduciary responsibility they have in the overall responsibility for a company’s financial health means you need to find the absolute best person you can. Again, this is something executive search firms can carry out on your behalf. The search firm can use its local knowledge to ensure candidates are correctly accredited for the role.
Mitigate risk when hiring a CFO
Out of all of the C-level positions, not knowing how to hire a CFO correctly, while considering all of the various local regulations is the biggest risk. This is the added value using an executive search recruiter brings to the table that can mitigate substantial risk while carrying out the process as fast as possible.
Best practices on how to hire a CFO
Most businesses do not know how to hire a CFO and the best practices for hiring one. It’s a complicated task, and this is why most companies rely on executive search firms. However, working with an executive search recruiter like myself or a company like Boyden, where I am a Managing Partner, takes these best practices into consideration. It will make your hiring process more efficient and less frustrating, mitigate risk and help you find better talent.
Plan Far in Advance
Replacing a CFO can be a long process, taking 6 months or more until you find a suitable candidate. So the first thing you need to do is start as early as possible. Depending on your timeline, this may just be being present and networking with other financial leaders to maybe find one in your network . But most likely you have been given 3 or less months notice to replace your CFO.
A CFO has such a high level of control, you will want to choose from a range of candidates. You should also check their references and any required qualifications. Along with having several in-depth interviews with various teams including the board of directors, the current standing finance & accounts team, the C suite, and more.
If you are in a rush, I recommend even more that you work with an executive search firm. As your business can most likely not afford its CEO, CHRO, or Chairman to spend all their time finding a range of candidates, the expert experience and network that executive search firms have will be incredibly valuable to you.
Replacing a current standing CFO? It’s best if you conduct a confidential executive search with an executive search firm and find a replacement without advertising publicly to ensure you do not go without a CFO for a certain period of time, thereby causing instability in your business.
Create a dedicated CFO Search Team
Having a focused lead in your search is necessary albeit one person or a team composed of representatives from the board of directors, C-level, and finance and accounts team. A team is generally the best option as they can provide unique experience and input for each of their niche experiences and roles, to help create a better unbiased selection process.
This team can engage their wider groups at each level they operate at helping to search for new candidates. But also facilitate the process with the executive search firm and the recruiters you team up with.
Determine what your next CFO should be like
It is crucial your team gets aligned on how an ideal CFO hire would operate and perform in the role. So it’s important to discuss how your next CFO hire should operate. Consider who they have to work with, and also establish the stage of your business and what key experience would help your CFO Hire excel in your business.
It’s important to highlight experience, skills or industries who you believe are irrelevant and not valuable to look for. Or even more, ones that you want to completely avoid.
Create a compelling job description.
With a core established list of needs, wants, do not wants. You can write a job description. A Job description will help both those internally doing outreach and external executive recruiters. So having this somewhat prepared before you start your search will just make everything more efficient and those who are doing the search on your behalf find better candidates faster.
What’s a compelling CFO job description? It is strongly recommended that you check CFO job ads on LinkedIn as well as other online job boards so that you can have a better idea of what the norms are in your field and how you may differentiate yourself from the competition with your job listing. Because having a listing that is both distinctive and enticing is what draws in the best candidates for the job. This means that you need to provide a good presentation on the company and the industry, describe where your company is, and the qualities, talents, and qualifications that you desire from your future Chief Financial Officer.
Work with an executive search firm
What does an executive search firm do? They shoulder the responsibility of the work involved in the search process from within your own team, utilizing their expertise to help you source better talent more quickly. Thereby allowing your leadership to concentrate on the day-to-day operations of the business. Do you want to be connected to a global executive search firm? Contact me and I’ll help you identify someone who specializes in the needs of your given industry and has deep experience with role you want to fill.
Promote your position and being search
To hire a great CFO, you need as many people to see your listing as possible. As well as proactive recruiters reaching out to top talent. Top Talent is often not looking for a new job as they are doing an excellent job elsewhere and being rewarded for it. That is why executive search firms are so valuable. They have the experience and knowledge in how to approach world-class talent.
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