Managing the Risk of a CFO Transition-Part 3

Align the Role to the Organization’s “Life Stage” Needs

The basic recruiting criteria for a public company CFO are relatively straightforward—background in finance/accounting; comfortable with public company financial reporting rules, internal controls, risk management, budgeting and operational analysis; strategic insight to a broad range of stakeholders; and able to lead a finance operations team.

As the list grows, the combination of qualities becomes a more difficult blend to find. An effective CFO must demonstrate not only strong technical, analytical and business acumen, but also “soft skill” competencies—communication, problem solving, negotiation, conflict resolution, relationship management and coaching and mentoring.

The odds of a successful “fit” are improved by looking for a CFO whose expertise matches that of your company’s current “life stage”, or the five-year goals your company is trying to achieve. For example, if your growth plan includes acquisitions, you need a financial leader who can negotiate deals and understand the complexities of valuations and post-merger integration. These needs are dramatically different from a business that needs to improve financial efficiency and achieve a turnaround. The track record of navigating a certain type of financial terrain outweighs factors like industry experience, and must be part of the recruiting criteria.

Don’t miss tomorrow’s installment, Use Interim Leadership to Minimize Risk.