What Every CEO Should Know About Hiring a CFO

What Every CEO Should Know About Hiring a CFO
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By: Amanda Reseburg

The role of company CFO has evolved over the years, moving from a traditional financial manager and organizer to a driver of overall company success. The modern CFO is a strategic partner within the organizational structure, providing valuable direction, experienced decision-making, and effective leadership. 

A strong CFO hire can mean the difference between a company being financially healthy and failing to meet financial goals. When hiring a CFO, companies must take into account several factors, including the needs and opinions of stakeholders, its current financial performance, and choosing someone who will fit well within the organization’s structure and culture. 

“You want to seek someone who can craft a forward-thinking strategy personalized to your business goals,” explains Vatsal Thakkar, CEO of Lineal CPA. “A CFO is not a one-size-fits-all position.” 

Explore what every CEO should know when looking to hire the right CFO for their organization, including the importance of their role and how it can lead to massive growth for one’s company. 

Understanding the CFO’s Role

“The days of a CFO delivering an Excel spreadsheet with an income statement and no visibility are over,” says Thakkar. 

Today’s CFOs are multifaceted professionals who greatly contribute to the overall success of a business. CFOs offer financial planning and analysis, but also leadership, compliance direction, risk management, capital fundraising, and even technological integration. 

“The best CFOs can dive deep into a company’s financials,” Thakkar adds. “CEOs want to understand the impact of every decision they make, and CFOs can help them make sound financial moves.” 

A good CFO is adept with budgeting and forecasting for the organization, helping shape the company’s overall financial strategy — without which the company could not survive. Along with the CEO and other top executives, the CFO leads the company, helping to align the financial plan with the company’s long-term vision. 

One of the important aspects of a CFO’s role is risk analysis. From keeping a keen eye on market fluctuations to developing mitigation strategies, a good CFO can keep a company from falling into financial turmoil. 

By guiding the C-Suite in optimizing costs, analyzing the market, and improving efficiency, CFOs can save companies thousands to millions of dollars annually. A recent study showed that 38% of modern CFOs are more strongly focused on cost savings than revenue growth.

“Hiring a CFO with a background in not only financial management but also strategic planning and risk management will give your company a distinctive advantage,” Thakkar says. 

Identifying the right person for the job

Now that you know what a CFO’s role should be, what are the key components of a well-rounded CFO hire? “While the relevant degrees and education are mandatory, the CFO that a company hires should have a multitude of skills,” says Thakker. 

Today’s CFOs should have a minimum of a Bachelor’s degree in a financial area, such as accounting or economics. However, many will also have an MBA and professional certifications, such as CPAs. It’s also imperative that today’s CFOs are proficient in updated technology, such as financial and enterprise resource planning (ERP) software systems. 

Experience is also an important factor when hiring. The CFO who is up for the job should have a successful track record guiding other organizations, especially in similar industries. Their communication and leadership skills should be a top priority, as these will speak to their ability to think strategically, problem-solve, and communicate solutions effectively. 

According to Thakkar, a CFO should also be a good cultural fit for a company. “The person you hire needs to understand the company’s values and goals,” he explains. “Needless to say, their vision and idea of success should align with the CEO.” 

The hiring process 

The hiring process for this position should include a thoughtful and thorough job description. The more in-depth the job posting and description, the better the candidates will be. CEOs should be clear about the qualifications and skills required for the position and detail all of these aspects in the job posting. 

Many CEOs will leverage their professional network to find the right CFO. Executive search firms — or headhunters — can also be great resources for tracking down the perfect candidate for the CFO position. 

Any candidate being seriously considered should undergo several rounds of interviews, including at least one face-to-face interview with key stakeholders. Their credentials should be verified, and CEOs and the hiring team can even take time to speak to past colleagues and employers to get a well-rounded idea of who they are considering. The more in-depth the hiring process, the more apt you are to find the perfect fit for the role.

Hiring a CFO can be a transformative move for any organization, as choosing the right person can positively impact the company’s financial health and help it reach its long-term goals. The role of the CEO is critical in choosing a CFO. You are being looked to as a leader and key stakeholder for the organization, so it is paramount that you understand the role of the CFO and how important it is to the overall success of the company.

By avoiding common errors such as a rushed hiring process or bringing on someone who you may know personally but is underqualified for the job, CEOs can find a CFO who is truly an investment in the successful future of their business. With a successful hire and the right financial leadership at the helm, organizations can reach their full potential. 

Published by: Nelly Chavez


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