What a Board looks for in a CFO
Dan Wells October 17, 2023
It is essential that the next generation of finance leaders fully understand what a Board looks for within an effective CFO.
Within his book called “Boards”, Patrick Dunne, an experienced chair and board member, covers what a Board should look for in an effective CFO. Patrick compares this to another version of Maslow’s hierarchy of needs:
In a similar manner to Maslow’s triangle, each base level needs to be effectively delivered to provide a building block for the next level of requirements:
- Integrity: Strong levels of trust and reliability are absolutely fundamental to the CFO role and hence form the core foundation for future success;
- Technical competence: A finance leader needs to be capable of maintaining proper accounting records, making key judgements and ensuring compliance;
- Management skills: Robust leadership and project management skills allow a CFO to successfully manage your finance function, project manage operational change
- Sales skills: The modern-day CFO needs excellent influencing and negotiating skills to obtain management buy-in for financial control, to drive new initiatives and to effectively communicate the company’s vision to key stakeholders;
- Board skills: A CFO acts as the main Strategic Business Partner to the management team. You need to be fully joined up with the CEO and the Board to help drive forward your organisation.
- Strategy: Finance leaders offer a unique financial perspective, along with a strong awareness of risk and governance procedures. These components are an essential part of the strategic decision-making process.
- CEO skills: Effective CFOs require many of the same characteristics possessed by the other directors and you may often be regarded as the successor to the CEO.
It is worth noting that most Boards will assume that their CFO already possesses robust levels of integrity and technical competence, hence these two skill sets will form the main foundation of the role. If these layers are ever undermined, then every layer above it will be severely challenged.
