How do I find and hire a CFO?

by Ryan Krumroy
Senior Associate Recruiter at Charles Aris Inc.

There’s a point in the evolution of every company when a true professional financial executive becomes a necessity.

Every serial entrepreneur who has steadily grown a business knows that there is a critical mass at which cousin Eddie is no longer adequate for managing the financials. Even if a less-than-ideal family member has been replaced by a competent finance professional, revenue factors eventually make a CFO not just a necessity but a godsend.

I expect that most if not all of you reading this article can fully appreciate the strategic impact and benefit of having a true CFO. We’re not talking about a glorified bookkeeper (as helpful as they can be) or a highly qualified rock-star accountant. We’re talking about a CFO who can shepherd an organization through multiple financial options and serve as a fiduciary, engaging with all the functional areas of a business; serving as a chief metrics officer; helping identify areas of margin which can be gained; and facilitating and integrating acquisitions.

How exactly does one find a CFO?

Let’s look at some options:

  • Tap into a network of experts (bankers, audit firms, investors, board members, etc.)
  • Publish job postings
  • Conduct an internal search, starting with Monster, FENG, Ladders, LinkedIn, etc.
  • Hire a contingency search firm
  • Hire a retained search firm
  • Employ a fractional CFO


Having conversations with people in your organization’s network is almost always a prudent exercise. Many a good CFO has been brought to light by engaged board members or vested stakeholders. It is fair to assume that if this process is to prove successful, it will be done in short order. A company should be able to figure out whether to spend time with any one particular prospect within a matter of days or weeks.

I have replaced many CFOs who were the banking partners of investors and were asked to become manufacturing CFOs. Don’t settle for a distantly relevant skill set – industry experience needs to be appropriate or at least related.

Job postings

An organization needs to be prepared for an onslaught of interest from marginally qualified candidates if it decides to pursue this path. Job postings are overwhelmingly visited by the underemployed or unemployed. This makes sense. What rock-star CFOs are going to look at online job postings? They simply don’t. You may get lucky and have your posting forwarded to a legitimately qualified individual, but the chances are high that the organization is going to spend a lot of time sending “Thank you for your interest!” emails to people who possess a fraction of what is required. Job postings can work well for more junior positions but are less than ideal for CFOs.

Internal searches

The question that surrounds this category is really about infrastructure. A large portion of Fortune 500 companies have dedicated talent acquisition groups while the remaining will simply have HR groups. Smaller organizations will likely have an HR person or HR team but few will have a sophisticated talent acquisition team dedicated to executive recruiting. For an internal search to be successful, the question the CEO and board should ask is whether they feel confident about the following factors:

  1. Is there a clear operational and strategic alignment of the board and the internal search group?
  2. Does the group have the capacity to dedicate its time to the effort?
  3. Is the company comfortable with having its own employees outbound-calling direct competitors or is there a legitimate concern about blowback?
  4. Do the employees have a proven track record on less critical searches and can they scale up to the CFO level?
  5. Would the assigned team have the relentless drive to push a strong ego-driven executive and challenge them or will they only capture actively looking candidates?

Contingency search firms

Finding a world-class CFO demands multiple in-depth conversations which quickly become quite personal. Most contingency search agreements are “nonexclusive,” which often results in a search firm being hesitant to share important details or in most cases unable to answer much of what is important to a true CFO.

If you choose to engage a contingency search firm, be sure to have realistic expectations. Be prepared to assess how much time the CEO and/or board has spent with the search professional. And consider the following questions: Have financials been shared? Is the culture fully understood? Have 2-, 3- or 5-year strategic objectives been discussed? Have competitive threats been talked through?

If the answer is no to any of those questions, the next question that should be asked internally is, “How can I expect this recruiter to be able to explore, find and interact with a really talented CFO?” You may also be asking yourself if you could ever trust sharing all or most of this information with someone who is opportunistically calling people on your behalf.

Most professionals reading this post understand that a contingency recruiter’s lack of exclusivity flings that recruiter into a race to uncover, as quickly as possible, potential candidates who “look close.” Should you choose a contingency recruiter, be prepared to view a lot of résumés and interview lots of people who don’t fit what you really need.

From time to time, I hear that companies are irritated that they have wasted time with a contingency firm, interviewing people who aren’t right for any given role. But what do they really expect?

Is it fair to expect that your search partner is going to understand the nuances of your corporation and the caliber of professional you are really going to hire when the sum of your company’s intellectual contributions to the recruiter is a 30-minute HR conversation and a generic two-page job description that’s 90 percent identical to the past 10 job descriptions they got from other clients? To top it all off, your organization has likely given them a simple signed contract with no up-front financial incentive for the recruiter and a low probability that the recruiter is going to make any money on the deal. The lesson here: Be realistic, and if you have a really good contingency recruiter you likely should think of ways to build a deep partnership with them.

Retained search firms

Any good retained search firm is going to irritate its clients on multiple occasions.

Retained search consultants are going to ask for a lot of time up front from multiple people including the CEO, board members, COO and anyone else who may have a deciding vote on this hire. It is also fair to expect that they are going to ask you for information that may seem irrelevant at the time.

Keep in mind that a retained search firm is going to spend hours of time with a finalist for the job, and you need that recruiting team to intelligently field questions and counsel the CFO prospect as to whether this move makes career sense. You need them to be able to figure out where the cultural fit is wrong. You need them to know every last personal detail that may prove important. This is what you are paying for and you should expect that it is delivered.

You will need to be excited about having your retained recruiters making outbound calls on your behalf, representing your business in the marketplace. If you don’t feel that way, find another search firm, as the ramifications of having the wrong recruiter involved are significant.

In my nine years of retained search, I have on more than one occasion been brought in after another search firm was fired. This “tainting of the talent pool” can set nearly impossible hurdles such as:

  • an inaccurate bias against your company
  • an inaccurate understanding of the big-picture opportunity in your company
  • a turn-off for the one or two people who would have been the best professional fits for your organization

Expect the retained recruiting option to be demanding. It will also cost you some up-front risk in the form of a retainer. Don’t expect to see a lot of résumés. Remember, you are paying the retained recruiter to do the vetting for you, and to eliminate time and energy wasted on partially qualified candidates.

I would counsel against giving the recruiter a 100 percent retainer. It is best to negotiate some form of shared-risk approach, as that should keep both parties aligned on objectives and committed to finding the ideal candidate.

Fractional CFOs

A fractional CFO can be a nice interim step for a company that now needs a CFO. Many entrepreneurs growing their businesses and hoping to professionalize their companies don’t really know what to look for or what they even need or want in a chief financial officer.

An appropriately aligned CFO should have market mastery in the related industry. You can’t expect a heavy-manufacturing CFO to come into an e-commerce start-up retailer and bring instant value. There are plenty of firms which have CFOs on standby for new assignments, as many displaced executives are simply not looking to make a permanent relocation to a new city but would gladly travel for a defined period of time.

Another benefit is that a fractional CFO can bridge the gap and allow time to conduct a true search, preventing hasty decisions which are all too common. This option can also offer a “test run” of a potentially close-fit CFO candidate. There is a place, and there likely always will be, for a fractional CFO – but that benefit is not without cost. The costs are incurred not only in the form of high hourly fees but also in the fractional CFO not really being part of the team. You can’t expect this professional to be a strategic partner to the CEO when the relationship is by definition a temporary one.

Can fractional CFOs be great stopgap measures? Yes, but it is not ideal or advised in the long term. Three to eight months is about all that you should hope to have this person in play, as anything beyond that often results in limitations and repercussions.


  • Outstanding CFOs are worth their weight in gold.
  • It takes time to properly consider strategies for finding this pivotal leader for your corporation, then more time to select and execute a particular strategy.
  • Make sure that you are excited about the card you are going to play; if not, talk about those concerns with your trusted advisers.