05 Nov 2019
What every CEO should look for in a CFO
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The relationship between CEO and CFO is pivotal to success and our guide offers advice for CEOs making that all-important hire.
Today, a successful CFO needs to do much more than report on the financial impact of past transactions. CFOs are expected to be leaders who can see where the business is going and who can help the CEO strategize how to get there. There will be times when the CFO needs to push back with a ‘no’, but more often it’s their role is to work constructively with the business towards a ‘yes’.
Along with this shift towards greater strategic responsibility has come the expectation that the CFO will be the primary communicator of an organisation’s financial health and strategy. Both internally and externally. In addition, the modern CFO is increasingly expected to be entirely more operationally-minded, as well as tech and data-savvy.
Given this expanding scope of the role and the increased scrutiny of regulators, investors and boards, it’s not surprising that fortitude and resilience are essential traits for any CFO candidate.
Little wonder too that outstanding candidates who tick all the boxes can be few and far between.
In compiling this guide, we have drawn on our experience of leading successful executive searches for exactly those kinds of rare individuals. We’ve also reflected on our clients’ evolving expectations and needs when hiring CFOs, and analysed market trends across the global Odgers Berndtson executive search network.
“CEOs' roles have expanded exponentially over the last two decades, so a CEO can no longer do their day job in a day. The CEO needs to delegate some elements of their day job, and the CFO is a great candidate to take on an expanded role.” Mark Freebairn, Odgers Berndtson, London.
For CEOs looking at their next CFO, we can point to some clear take-outs.
Your next CFO should be a skilled communicator
Your CFO and their teams need to be approachable team players, fully-integrated within an organisation. Helping to drive transformation and make rapid, well-informed investment decisions.
As such, the role is now much more suited to a charismatic people-person with a high EQ and an interest in meeting people from every part of the business. What’s more, the CFO will also often be expected to manage external relationships with institutional investors, shareholders, lawyers, accountants and stock analysts.
Is your CFO up-to-speed on all business operations?
In the past, the functions of CFO and COO were kept separate. Today, although this varies by industry, the COO role is increasingly becoming part of the CFO’s remit.
CFOs are expected to take on much more operational responsibility. This makes perfect sense. After all, from where the CFO sits, they have a view of the entire business. And what makes it work. Having operational experience ensures your CFO has enough understanding of the inner workings of the business to make decisions about appropriate resource allocation.
CFO as tech and data champion? Yes.
Unlocking the value in data analytics and harnessing innovations in digitisation, artificial intelligence and automation to drive efficiencies and reduce cost, is business-critical today.
It needs to be high on the agenda for the finance function. A CFO needs to be technologically fluent to assess opportunities for technological investment, both within the running of the finance division and to enable the organisation to meet its commercial/strategic aims.
Increasingly, not only are CFOs custodians of an organisation’s financial data, they are the custodians of a broader set of data related to business operations, technology and digital transformation.
Can your CFO bring together data and insights from across the organisation to help drive change and create real value?
“The role has changed quite markedly in the last 10 years. Our clients now demand CFOs with a good understanding of AI, digital and data analytics.” Phil McCann, Odgers Berndtson Sydney.
A most resilient multi-tasker
The CFO role is a difficult one with a myriad of risks, challenges and opportunities. A CFO’s remit seems to be constantly expanding and pressure from internal and external stakeholders can be immense, especially when the CFO is called upon to deliver bad news. For that reason, resilience is an increasingly important trait for a CFO. In addition, the CFO of today needs to be very agile, open to change and able to deal with ambiguity.
“Given that the role is ever-expanding, and the pressure is ever-increasing, demonstrating resilience is important.” Duncan Hogget, Odgers Berndtson, London & Leeds.
What about qualifications?
CFOs still require the accounting qualifications expected, but we’ve found that candidates can stand out by having a blend of accounting, finance and business experience.
CEOs should also look out for candidates who have experience working internationally, conducting financial planning and analysis or taking on operational side projects, in addition to the more traditional accounting experience. This shows initiative and makes for a better-prepared potential CFO.
“They need to be agile and open to change. They must be willing to step out of the finance box.” Chania Stempowski, Odgers Berndtson, Cape Town.
In addition, MBAs are more common and sought after. People with financial competency who also have experience in private equity or in sophisticated corporate finance roles tend to make good strategic financial executives.
The evolving CFO
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