The role of a Chief Financial Officer (CFO) has evolved over the years, and as a result, the skills and traits required to excel in the role have also changed. The role was once limited to managing the finance department and the company’s financial health. Technology has changed that. The responsibilities have evolved and the key competencies of this role are more focused on leadership and strategy than ever before. With that evolution, what are the key duties of the role and what traits make a successful CFO?
Reporting to the Chief Executive Officer/Managing Director (CEO), the CFO is a senior executive responsible for managing a company's financial health, operations and strategy and the oversight of the company's financial planning, budgeting, forecasting, accounting, and reporting. The CFO is also responsible for managing the company's risk and ensuring compliance with regulatory requirements. They will play a significant role in strategic planning and key decision-making.
Where Accountants, Bookkeepers, and Financial Reporting Managers are tasked with working with a backward-facing approach through record keeping and reporting, the skilled CFO takes on a more forward-facing outlook. A successful CFO has a vision for the company's future and works alongside the CEO to develop a long-term strategy that aligns with the company's goals. They must possess strategic thinking abilities to align the financial goals with overall business objectives. They are skilled in forecasting future financial trends and making informed decisions to drive the company's growth.
To express this trait in an interview, provide examples of how you have developed and executed strategic plans in previous roles.
The modern-day CFO has the interpersonal and communication skills to build relationships with multiple stakeholders, both internally and externally. A successful CFO understands the operational aspects of the business, how this impacts financial performance and how to work with operational leaders to help them understand the financial concepts. Exceptional CFOs can distil complex financial information into clear, concise messages that resonate with diverse stakeholders. They can provide realistic strategic advice beyond accounting and reporting. They work closely with other departments to ensure financial decisions align with operational goals.
To express this trait in an interview, provide examples of how you have collaborated with other departments to improve financial performance.
A successful CFO knows the opportunities presented by modern-day technologies and software. Depending on company size, CFOs can often find IT being rolled into their scope of responsibilities making technological knowledge increasingly important. They are skilled in managing change and implementing new strategies that drive the company forward. By ensuring they stay up-to-date with technology, they can understand how new systems can be implemented to simplify business financial practices in their organisation. That is not to say they need to be an IT guru or programmer, but they should know what is possible. They can use these tools to analyse complex financial data, express reports clearly, and make informed decisions.
To express this trait in an interview, provide examples of how you have used or implemented specific tools to aid business performance.
The world has changed faster than anyone could have imagined since 2020. Hybrid working, video conferencing, and the job seekers' demand for flexible working mean that finance leaders have had to adapt quickly to new ways of managing and motivating their teams. Contemporary CFOs are skilled in understanding the needs of their teams whilst being able to drive them to desired outcomes either in person or remotely, ensuring deadlines and accuracy remain paramount. Equally, identifying and hiring staff against key competencies in this ever-changing landscape is critical. They foster a culture of accountability, mentorship, and collaboration within the finance department and across the organisation.
To express this trait in an interview, provide examples of how you have led teams through periods of change.
A critical trait of a successful CFO is the ability to stay current with the changing financial landscape. Many changes can occur concerning legislative, regulatory and statutory reporting requirements. A Chief Financial Officer should frequently attend accounting conferences, stay up to date with their professional memberships and always seek out the best external advice around risk, tax, changes to accounting standards, etc. The successful CFO is skilled in developing strategies to mitigate risks and is proactive in identifying potential problems for the business before they occur. They should be aware of all upcoming changes and plan for them ahead of the deadline.
To express this trait in an interview, provide examples of how you have advised and implemented changing accounting standards in previous roles.
A job title or large salary does not make a successful CFO. It is the key skills, experience, and tools that set a CFO apart. To excel in this role, it's important to effectively demonstrate the above traits in interviews, by providing examples of how you have used them to drive success in previous roles.
If you are looking to hire a CFO, it is a big decision especially if it is a new role. Read our article on when and why an organisation should bring a CFO on board.
For job seekers, when preparing for your next CFO interview understand what kind of specific interview questions you might be asked. Follow this link to understand what questions you should prepare for.
If you're looking for your next role as a Chief Financial Officer, or looking to hire, contact us at Richard Lloyd Recruitment and speak to one of our executive recruitment experts. We can help you find the perfect role or hire that aligns with your experience or your requirements.
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