What a CEO Wants from Their CFO

Every leader needs a second-in-command that they can rely on. It’s why Presidential candidates spend months debating their choice of VP. Your second-in-command is a reflection on yourself and is expected to work in unison with you. A talented deputy will fill their leader’s blind spots and be their lead advisor.

While every company is different, the relationship between a CFO and CEO is vital. A CEO needs the confidence of knowing they can rely on their CFO to guide their decision-making and provide vital forecasting.

Companies will often hire a CFO when they need a fresh approach to their company. They want an outsider who is excited by the company’s vision and can create more effective strategies with forecasting and analysis. Every CEO needs CFO who will challenge the status quo – and for the better.

At FD Capital, we’ve worked with companies across every industry. While each company has its specific requirements, most CEOs want the same things from their CFOs. We’re breaking down the CEO and CFO relationship to see the skills that every CFO candidate should be developing.

The CEO/CFO Relationship

The relationship between a CEO and CFO isn’t too dissimilar. Every CEO wants a CFO that they can rely on. While the role of CFO has changed rapidly, CEOs are still looking for the same qualities from their top advisor.

Whether it’s a Fortune 500 company or a tech start-up, CEOs are consistent with what they want from their CFO. Today’s CFOs have become the second most important c-suite executive, after the CEO. Their visibility is increasing as the role expands beyond the remits of the finance department.

A company’s success relies on the compatibility of the CFO and CEO. A CFO and CEO are the top tier of the leadership team. As a CEO, you want to find the other half of your double act.

At FD Capital, we connect talented financial professionals with opportunities throughout the UK and beyond. We have a track record of matching candidates with CFO opportunities to help them progress in their careers.

Every CFO candidate should know what a CEO expects. Looking at the recruitment process from the CFO’s point of view can give you a vital edge over the competition.

We’re sharing what CEOs across every industry want to see from their ideal CFO. A winning CFO will have the transferable skills to oversee everything from forecasting to cost modelling while acting as a leader within the company.

1. Strategic Decision-Making and Forecasting Optimisation

Forecasting is one of the most vital roles of any CFO. It feeds into every aspect of the decision-making process. The changing socio-economic climate and events like the pandemic have made it difficult for companies to accurately project their quarterly revenue.

Supply chain issues and rising costs mean that companies are finding hurdles at every point of the cycle. The CFO’s financial planning and analysis function (FP&A) has become even more essential. Optimising forecasting will allow the company to make strategic decisions to navigate the current business challenges.

CFOs should look externally when fulfilling their planning and analysis function. Analysing the industry, consumer behaviour, and economic forecasts can feed into the company’s short and long-term strategy. The CFO’s FP&A will help to ground the CEO’s decision-making, particularly in competitive industries and those hardest hit by current economic challenges.

2. A Confident CFO

A CFO needs to be confident in their aptitude as a strategist. Some CFOs are too focused on the data. A CEO wants their CFO to feel like they can give their opinion and not just data.

Every piece of data that is presented should be given within the context of the wider picture of the company. CFOs who have strong communication skills will be able to see beyond the data and make a genuine contribution to the company’s development.

If you’re taking the next step in your career by becoming a CFO, look for opportunities to develop your FP&A skills. Today’s CFOs need to have the adaptability to deal with the consequences of the cost-of-living crisis and rising costs. Every CEO needs their CFO to be confident in their abilities as a forecaster and strategist.

CEOs of non-profit organisations will want a CFO who is confident in the mission of the company. Their work will focus on communicating the company’s mission, as much as creating a strategic plan.

3. Cash Flow Planning

Cash is king. This cliché remains true even in an age of crypto currencies. Liquidity has never been more important. A CEO will rely on their CFO to create an effective cash flow model that includes planning for any possible outcome.

Part of this cash flow planning should include identifying how many weeks the business could continue to operate with liquidity under stressful scenarios. Cash flow planning requires the CFO to take an active role in almost every aspect of the business. They need to understand every lever in the system, from cash outflows to the sales cycle.

4. Data-Driven CFO

Every CEO wants a data-driven CFO. Operating with poor or outdated data could cause financial hardship for the company. The strategic importance of a CFO comes from their ability to provide and analyse high-quality data.

Data gathering and analysis have to be timely, precise, and accurate. Manual data processes are often a catch-22 situation. CFOs spend a large portion of their day carrying out manual data processing, preventing them from being an effective advisor to their CEO.

CFOs typically find that they carry out the largest amount of manual work of any c-suite leader. It leaves them limited in their potential to provide quick and up-to-date analysis. The labour-intensive nature of manual data gathering means CFOs could find themselves providing wrong or outdated information.

A talented CFO will lean into technological innovations to maximise their time and provide better and more accurate data. A recent survey of CFOs found that they would prioritise communication, financial reporting, analysis, and partnerships if they had more time.

A CFO needs to fulfil all of these functions to be effective within their company. You want to be data-driven with systems in place that allow you to fulfil the changing role of CFO.

5. Promote Technological Innovations

Most companies have typically underfunded their finance technology. It leaves CFOs spending time completing tasks that could be automated. While Excel is the go-to programme for most CFOs, technological innovation has advanced in leaps and bounds since then.

A high-performance CFO will create a technological ecosystem that creates a cohesive and streamlined network. Investing in technological innovations can produce more time and cost-effective results by enabling collaboration throughout the company. Digital technology can also reduce errors and create a system that produces more accurate and up-to-date forecasting effectively.

6. Communication and Stakeholder Engagement

Communication is more crucial than ever before. Today’s CFOs are expected to engage with almost every stakeholder in the company. CEOs want a CFO who can accurately communicate their forecasting and findings to everyone, from investors to employees and board members.

We always recommend that candidates brush up on their communication skills. This ‘soft’ skill will come in useful every day. Your communication skills will help you translate your forecasting into actionable strategy and encourage potential investors to support your company.

Not everyone in a company will understand the stats and figures. A CEO needs their CFO to paint a picture of the situation, along with the short and long-term strategy, in everyday language. You’ll be expected to engage with regulators, investors, and external stakeholders every day.

Communication in Every Company Model

Communication isn’t just about engaging with stakeholders. It also extends to providing insight in a timely promptly by utilising the latest technology and developing ‘soft skills’. A talented CFO won’t be afraid to challenge their team and colleagues to embrace the vision of the company.

A CEO needs a c-suite executive who can articulate the company’s vision and value. The CFO needs to speak credibly about the company to potential investors, whatever status the company has.

Non-profits need their CFOs to be skilled communicators as much as public companies do. These organisations are in constant fundraising mode. The CEO will rely on their CFO to support the company’s vision and long-term goal. They don’t want a CFO who will spend an investor meeting presenting spreadsheets and bar charts. CEOs need a CFO who can translate the company’s mission, potential, and long-term outlook.

A CEO may decide to bring in an interim CFO to oversee the merger or acquisition of the company. CFOs bring more than just strategic insight. They can prepare the company for its next step while supporting it through the transition. A CFO will be vital to communicating the company’s vision and purpose throughout this process.

7. A Healthy Working Relationship

Every CEO wants to have a healthy working relationship with their CFO. The relationship between a CEO and their CFO must be built on trust. A CEO will usually turn to their CFO as a go-to for support and advice.

If you’re a CFO, you have to be prepared to give your CEO a full picture overview of the situation. You may find yourself having to step outside your comfort zone and deliver hard truths. A CEO wants a CFO who will be truthful with them – even when it’s difficult news.

A healthy working relationship between a CEO and their CFO is also built on integrity. A CEO wants to be confident that their CFO will act with integrity, whether dealing with potential investors or other stakeholders. Both c-suite executives should be able to work independently of each other and with full trust in the other’s behaviour.

Transparency feeds into this. CEOs want to work with CFOs who aren’t afraid of the truth. You’ll need to be able to sell the company’s vision, while not hiding behind statistics.

Although a CFO is expected to be loyal to their company and CEO, they’re looked to as an unbiased point of view within the company. Providing a biased opinion could lead to your company making costly mistakes.

Trust also plays into the way a CFO engages with potential investors. A CEO will want a CFO who will present a true picture of the company to investors and PE houses.

You want to think of the CEO-CFO relationship as being two business partners. Each wants to have the confidence that they can rely on the other to do their job effectively and in the best interest of the company.

Most CEOs look to their CFOs as a sounding board. Their CFO is the person they turn to when they need to work through ideas or understand problems within the organisation. CEOs don’t want CFOs who are ‘yes men’. They need CFOs who will challenge ideas, suggest alternatives, and present new approaches.

It’s no secret that most CEOs look to their CFOs as their future replacement. The CFO-to-CEO transition is one that we’re seeing become increasingly more common. CEOs want to expand the responsibilities of their CFOs to better prepare them for one day taking the top seat at the company.

Every CEO needs to have a healthy relationship with their CFO. It’s why it’s so vital to curate the recruitment process to the needs of your company and CEO.

Connecting CEOs with CFOs

Today’s CFOs are no longer spending their time on Excel spreadsheets and forecasting. CFOs are engaging with every aspect of the business – from board meetings to fundraising strategies, and mission setting. It’s no surprise that CEOs are setting the bar high for their potential CFO.  You might be interested in CFO Headhunters.

Every CEO needs a CFO that they can rely on. At FD Capital, we work closely with clients to identify the best candidate for their positions. Our curated recruitment process allows us to take a hands-on approach. We’ll identify the needs of your business and the qualities you want in your CFO.

Start your recruitment process to find a full-time or fractional CFO by contacting our team at recruitment@fdcapital.co.uk.

Adrian Lawrence

Adrian Lawrence FCA with over 25 years of experience as a finance leader and a Chartered Accountant,  BSc graduate from Queen Mary College, University of London.

I help my clients achieve their growth and success goals by delivering value and results in areas such as Financial Modelling, Finance Raising, M&A, Due Diligence, cash flow management, and reporting. I am passionate about supporting SMEs and entrepreneurs with reliable and professional Chief Financial Officer or Finance Director services.