5 Questions to Ask When Interviewing a CFO
For growing businesses, hiring a chief financial officer (CFO) is a significant milestone, denoting that the company’s health and growth requires a financial leader and strategist. As a result, few hires are more critical to a company’s continued success.
In their capacity as the financial helmsman, a CFO is responsible for steering the company in the right direction, overseeing the accounting and financial analysis departments, and ensuring that the business is operating within legal and regulatory parameters.
With your company’s financial health, reputation, and future on the line, you must be judicious about who you hitch your wagon to. So, when it comes time for the screening process, you should have several CFO interview questions prepared.
Considerations When Hiring a CFO
The questions you propose to a potential CFO should be tied to your business’ needs and financial goals. To ask the pertinent questions and find the perfect fit, you need to identify:
- Your company’s vision – The CFO you hire needs to align with your company’s ethos. Even if your CEO does not have the financial know-how for the specifics, they should be able to outline their short- and long-term goals, then suss out how an interviewing CFO would fit in relation to those desired outcomes.
- Your company culture – A CFO is often in charge of managing both the accounting and financial planning and analysis departments. In that role, they need to be able to work seamlessly with the existing personalities. Accordingly, their values, traits, and objectives should also be aligned with your own.
- Your company’s obstacles – Each company is unique and various industries have dynamically different challenges that must be accounted for. The CFO you select needs to know where your vulnerabilities are and then propose viable solutions.
- The required skill set – Certain CFOs provide specific skill sets. Some may be experts in business accounting, whereas others focus on mergers and acquisitions. And then there may still be different candidates who are well-rounded. What skills you need depend on your business’ goals and challenges.
Question #1—What Was the Financial Roadmap for the Last Company You Were With?
This general question gives you an opportunity to see how the interviewing CFO entered a new situation, took stock of its current status, challenges, and goals, and then went about pursuing those in both the immediate and long term.
Ideally, the candidate will have worked with a company of a similar size or status. By learning about the strategic initiatives they installed and asking follow up questions, you can discover:
- The hurdles they had to overcome
- Their problem solving methodologies
- The resources they leveraged to reach their goals
- The mistakes they made
A strong follow up question to ask is if there is anything they would have done differently knowing what they now know. The right candidate will answer this openly as opposed to demuring or making excuses.
Question #2—How Would You Grow a Company Like This?
Even if they do not have access to your company’s specific financials and internal resources, a strong candidate should be able to walk you through general plans for growing and scaling a business. Topics they might touch on include:
- Potential challenges and growth obstacles
- Market, industry, and regulatory considerations
- How they’d pitch the company to investors
Along these lines, your question could also touch upon how they would go about assessing the company. From there, they could create if-then scenarios with hypothetical strategies.
Question #3—How Would You Handle Your Primary Duties?
A CFO has various responsibilities in regards to accounting, forecasting, planning, and analysis. There are three main subtopics you should ask them to speak on, including:
- Reporting – How will they manage an FP&A team as they prepare financial reports that will eventually be shared with regulatory agencies, shareholders, employees, and potential investors? P&L, cash flow, and balance sheets need to be done accurately and promptly.
- Cashflow – How will they ensure that the business has enough liquidity to meet its financial obligations? Whether it is managing accounts payable and receivable or the issuance of debt, treasury department management will be a business-critical task.
- Financial strategy and forecasting – How have they previously navigated a merger and acquisition? A CFO is often brought on to help a company scale, thus earning the highest possible returns on its assets and capital. Your CFO needs to be comfortable managing and leveraging the FP&A team.
Question #4—How Have You Optimized Accounting Processes with Previous Companies
A CFO will spend a great deal of time working with the controller and accounting department.
In their role as head of finance, a CFO must identify areas within the accounting department where they could potentially streamline processes and drive efficiencies. Whether it is adopting new technologies or improving internal operations, an innovative CFO should constantly strive to simplify and automate issues.
According to Deloitte, a CFO should:
“Stimulate and drive the timely execution of change in the finance function or the enterprise. Using the power of their purse strings, they can selectively drive business improvement initiatives such as improved enterprise cost reduction, procurement, pricing execution, and other process improvements and innovations that add value to the company.”
Question #5—How Do You Share Bad News to a Board of Directors
A CFO will regularly have to interact with and report to the board of directors. They must periodically present the company’s financials, namely the three financial statements.
In this role, a CFO might have to be the bearer of bad news. Therefore, you need a partner that can communicate clearly and transparently without obfuscation or excuses, especially when discussing complex financial matters.
CFO Hub—Your Source for High-Quality CFO Candidates
Selecting a CFO can not be done rashly. In their role as financial leader, they have the power to drive a company’s success or failure. Therefore, you must be diligent and exhaustive when the time comes to ask CFO interview questions, such as those discussed above.
But where can you find an ideal candidate for your CFO vacancy?
Here at CFO Hub, we have an extensive network of qualified and experienced CFOs that you can hire on a full-or part-time basis. When you partner with us, we will help identify potential CFOs that complement the needs and circumstances of your business.