What CEOs Want In Replacement CFOs

Regardless of industry, talent retention is a continuing issue, and companies experiencing challenges acquiring and keeping quality employees are finding creative ways to attract the talent they need.

When an executive, especially a CFO, finds a new opportunity, companies can be left scrambling for a replacement. As the demand for interim CFOs has doubled in the past year, combined with the turnover rate of the position at a five-year high at the end of 2022, those in charge of picking up the workload left behind and finding the replacement for a departed finance chief are beginning to view finance talent differently.

Today’s finance leaders need not be just numbers professionals with an impressive MBA and Big Four experience. Boards of directors and CEOs are looking for an individual who can perform traditional finance duties and see the business in all its parts.

Non-Traditional Experience Wanted

A CEO trying to balance growth goals, meeting Wall Street’s or other investors’ expectations, and maintaining a positive company culture cannot do his or her job with an unreliable or inconsistent finance team.

According to Sam Bobley, CEO of the automated document analysis fintech Ocrolus, the best finance employees come with experience from various sectors, combined with the ability to communicate and translate the company’s finances into understandable data sets.

“Strong finance leaders think holistically about the business and think not just in terms of financial [key performance indicators] but operational lead and lag indicators and strategic business goals,” said Bobley. “The operational mindset is important for leaders who drive processes that enable the business to scale and achieve its growth objectives.”

Sam Bobley

Ocrolus “focuses on attracting and retaining financial leaders who are exceptional at translating and standardizing metrics to inform investors and industry professionals analyzing companies and solutions,” Bobley continued. “Our finance leaders have [worked at] blue chip companies, venture capital firms, and startups, which makes them experts at using data to craft a narrative that informs our financial stakeholders and internal teams.”

According to Bobley, it’s the gathering of knowledge through specialized experience that makes a good finance team member at any level. “This varied experience also gives them an understanding of the market and how our solutions support customers across the financial services sector,” he said.

The CEO-Finance Relationship

As data has shown a key factor to CFO retention is the CEO-CFO relationship, Bobley said his relationship with his company’s finance team is about checks and balances, with the finance team acting as the voice of reason when it comes to facilitating operations and making decisions.

“I deeply value my close-knit partnership with the finance team, with whom I work hand-in-hand to execute critical business activities, such as reporting, investor relations, fundraising, and strategic planning,” Bobley said. “One of the things I appreciate most is their ability to hold up a mirror, both to me and the rest of the company. They keep our shareholders and us well-informed, ensure that we make data-driven decisions, and ultimately help us operate at our highest level.” 

For CFOs brand new to the role, staying goal-oriented and communicating well is the key to execution. According to Christian DeChurch, who is in his inaugural full-time CFO role after joining Centri Business Consulting in February, staying focused on executing the strategic plan so that the vision remains clear boosts the finance team’s productivity and morale. 

Christian DeChurch

“CFOs should not get caught up in the tactical details of the business, as it can potentially sacrifice the [organization’s] overall success. [Instead,] entrust employees to enact the tactical details. This type of execution plays a vital role in increasing the capabilities of everyone within the organization and creates a culture where people feel valued.”

In Case of Departure

Should the sudden departure of a CFO force a company to compromise on the choice of its next CFO? Jason Harris, CEO of the tech-inspired mortgage and home equity loan provider Button Finance, said dealing with the departure of an executive is all about timing and reaction.

CEOs and their teams must be proactive in their search, know what duties need to be handled by an interim CFO, and agree on the skills and traits needed in the potential replacement CFO. “When a company in the lending industry faces the sudden departure of a CFO, it is crucial to take decisive actions to maintain stability and ensure a smooth transition,” said Harris.

Jason Harris

The lending industry is particularly vulnerable to challenges brought on by a departing executive, especially a CFO. “The specialized nature of the industry may make it challenging to find a quick replacement. Using outside vendors to assist with critical CFO functions is a viable strategy in this case,” said Harris.

DeChurch, a controller, head of finance, and an interim CFO in the past, said chief executives unsure of where to begin looking for a CFO replacement should assess their own finance team and workforce before outsourcing the task to a search firm. 

“Look within,” said DeChurch. “Ideally, a company has an internal growth structure in place that effectively grooms employees through the ranks, leading to a CFO that has been developed internally [within the] company’s culture. That sets a terrific precedent for an organization from top to bottom.”