VideoJason Karaian is deputy editor at CFO Europe.
Friendly Fire
At work, as in life, relationships can be difficult to sustain. Ever-shrinking executive tenure makes it especially difficult for a CEO and CFO to stay together for long. And with a severe downturn challenging companies' strategy and business models, some opt to change tack by making changes at the top. This often means looking for a new finance chief.
Over the past year, Caroline Raggett, a member of the financial officers practice at headhunter Russell Reynolds, says that boards haven't wavered in their profile of the ideal CFO candidate: it must be someone who's done the job before, preferably for a long time. "In a bull market, companies are open to the idea of a young, up-and-coming CFO who might add a new perspective, more modern practices and inject a bit more dynamism into the boardroom," she says. Now, however, boards want to speak with experienced CFOs, some going as far as limiting their search to candidates who were finance chiefs during the recession of the early 1990s. "Companies now recognise that experience from 17 or 18 years ago is relevant to today's market," she says. "The dotcom bust doesn't compare."
Once a CV has been examined, how much does the rapport with the CEO influence hiring? "Chemistry is critical," says Suzzane Wood, a partner at Heidrick & Struggles specialising in finance searches. For her, this means "complementary skills and empathy; they do not have to be friends." In fact, "the minute you fall in love with your CEO, you lose all value," she adds.
At the same time, good CEOs don't hire CFOs based solely on personal affinity. "The CFO is your co-pilot, so why would you hire you again?" Wood asks. A "healthy tension" between the top two members of the executive team is generally preferred, and especially encouraged at private equity-owned companies, she adds. In general, "CEOs are CEOs because they know that building a talented, diverse team is critical to their success. They're not marrying these people for love. They're marrying for profit."
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