What Makes a Good CFO?

A CFO, or Chief Financial Officer, plays an extremely important role within a business’ financial team. In fact, the role of a CFO is often considered one of the most important parts of any organisation, due to the dynamic and strategic nature of their position and responsibilities in decision-making. In this article, we’re going to take a deep dive into what makes someone a great CFO for your business, as well as what you can do to help find the right CFO every time. Let’s start at the beginning.

What does a CFO do?

A Chief Financial Officer (CFO) is a member of a business’ executive team and, amongst other things, is responsible for overseeing and looking after the entire organisation’s financial function. They carry out several important tasks as part of their role, including financial management, planning, reporting, budgeting, analysis and more. A CFO also plays a key part in the decision-making of a business. Using the financial analysis and insights that they routinely gather, they work to provide the strategic information that a management team or Board, needs to make better business decisions. Not all CFOs are the same, however, and not all CFOs work in a similar manner. This means that you cannot assume every CFO is going to be the right fit for your business. That’s why you need to ensure you’ve got a clear idea of what you need in a CFO for your business when you’re looking to hire one.

So, how do you choose the right CFO?

Given that all CFOs are different, the best place to start is to sit down and define the exact criteria that you need your new CFO to meet. Here are some general traits that you may consider to you get started:

  • Values that are aligned with yours and the business’
  • A strategic mindset
  • A high level of financial experience
  • Familiarity with advanced financial modelling tools
  • The ability to nurture high-quality relationships with their team and other business leaders
  • A drive for continuous improvement
  • A balance of risk mitigation and eye for opportunity

In essence, your CFO should be like your business partner, with the flexibility and adaptability to work in and around your business and its various components – not just in the Finance department – to identify the risks and opportunities available and achieve your core goals and objectives.

What are the most important attributes of a good CFO?

Here are several other qualities we believe you should be seeking in your next CFO:

  1.   You need a CFO with strong leadership and collaboration skills

This means that your CFO must understand your business and your team from the ground up and work to develop a dynamic and empowering relationship with every member of your team. Think about it – you could hire the most technically competent CFO in the market, but if they don’t collaborate well with your team or they’re simply trying to push their own agenda forward, it’s just not going to work. That’s why your CFO’s technical skills must be secondary to the way that they work with you and your team.

  1.   You need a CFO who’s not just going to say “yes” to everything

You want a CFO who’s going to challenge and empower you as a leader by being able to have those tough yet constructive conversations you need to have to make real progress.

  1.   You need a CFO who’s going to consider all stakeholders

Depending on the size of your business, you likely have a variety of different stakeholders that need to be considered with every decision. You want to ensure that your new CFO appreciates your stakeholders and is willing to work with them to achieve your goals.

  1.     You need a CFO who isn’t afraid to roll up their sleeves and get their hands dirty

Your CFO should be regularly visiting your team on the ground and getting to know them and your business from A to Z. If they’re just going to sit behind a computer all day, you need to look for someone else. Knowing when to get their hands dirty is keen, as you always want to ensure that your CFO is not ‘buying themselves a full-time job’ by getting too involved with granular tasks that could be done by others. For example, having your CFO run payroll each week would be an expensive way to run your finance team.

  1.     You need a CFO with the right mindset

To effectively handle and carry out such an important role in your business, you want to ensure that your CFO is in it for the right reasons. Perhaps even pause to consider if the best option for your business is to find a CFO who isn’t directly connected to your industry as they may have different thinking patterns and can offer a fresh perspective for your company moving forward.

  1.     You may need a CFO who isn’t part of your headcount

Did that sound a bit different? Well, let’s challenge you a bit. Sometimes hiring your own CFO may not be the best option for your business. As an alternative, Dexterous offers a managed finance function service where you can access a Virtual CFO or a team of CFOs – but at the fraction of the cost of a full-time hire. Let’s explain this a bit further.

Dexterous can help you on the search for a new CFO

The kneejerk reaction for some business leaders can often be to simply hire a high-expense, full-time CFO – however, that may not necessarily be what the business needs. Here at Dexterous, not only do we provide part-time and on-call CFOs, but we also offer a hybrid approach that combines a global workforce with innovative technology. Our team serves as your finance department working internally for your business. We take care of your business’ financial function, so you can be more agile and capable of scaling up and down as needed  – all without the excessive headcount expense. Learn more about how we can help you cut costs and not productivity with our Finance Department as a Service solution here. Dexterous even offers CFO on-call mentorship services for your team We even offer “on-call mentorship” to internal or junior CFOs that may still be quite green in their new role and require ongoing advice and guidance to help your business succeed. That’s the beauty of the Dexterous model – it’s entirely flexible to help meet your unique business needs! Want a reliable finance department to help you deal with any business challenges? At Dexterous, we go far beyond bookkeeping and external accounting services. We provide a turnkey managed finance solution that works for you through a financial, operating and growth lens. This means that we leverage all the latest business tools including Robotic Process Automation (RPA), access global talent and manage your finance department with the local expertise of our Sydney team.  We also equip you with a strategic approach and cost-effective function not just to address the challenges of recession today, but to help you thrive and achieve more growth in the future. Reach out to Dexterous and transform your finance department today.