Matching Your Needs with the Best CFO Profile
By CFO Recruiter Shawn Cole — Top CFO Recruiter Shawn Cole is a trusted thought leader and premier authority on CFO recruitment across all industries. As President & Co-Founder of Cowen Partners, Shawn Cole is a trailblazing leader in the CFO recruiting space, known for finding exceptional talent while uncovering key insights about today’s C-suite leaders.
In recent years, the role of the corporate CFO has drastically changed. These professionals have evolved into more than just the developers and enforcers of a company’s budget. Now, CFOs are strategic business partners, working with the CEO to deliver value to shareholders and ensure the business can meet and exceed objectives.
The reason for this shift is multifaceted. One factor is that the definition of value has changed, and shareholders are considering more than just earnings. ESG, technology, and employee relations are starting to affect the idea of enterprise value in the corporate world.
Tightening regulations, geopolitical tensions, and the rise of emerging technologies like artificial intelligence also play a role. They, too, have contributed to the CFO’s growing portfolio of responsibilities.
When hiring for the CFO role in today’s landscape, boards must consider two profile types: a reporting CFO and an operating CFO. While the former delves deeply into compliance and the financial outlook, the latter concerns themselves primarily with operational efficiency.
It’s essential to understand these two profiles, what shapes them, and how they lead. That knowledge can help boards decide which type is the best fit to achieve organizational goals.
Understanding the Reporting CFO
A reporting CFO leads the business in three key areas: compliance, governance, and financial stewardship. This profile leans toward the traditional role of ensuring integrity in budgeting and financial reporting.
These professionals also deliver value in having the expertise needed to navigate the rapid pace of change in the regulatory landscape. Furthermore, they understand how to govern with financial health in mind.
Educational Background
Reporting CFOs often hail from one of the “Big Four” accounting firms:
- Deloitte
- PricewaterhouseCoopers (PwC)
- Ernst & Young
- Klynveld Peat Marwick Goerdeler (KPMG)
They typically possess an MBA with a focus on finance or a different advanced degree in one of these areas. They may also come with a CPA or similarly relevant designation.
Core Experience
This profile is especially focused on financial integrity. As such, they have often garnered experience with accounting, reporting, and audit functions. They also have extensive compliance knowledge when it comes to SEC filings and SOX regulations.
In an environment where rules tend to change quickly, they make it a point to stay on top of these developments. A reporting CFO understands how new regulations affect the current and future business outlook.
With extensive experience in publicly traded companies, this CFO understands the value of relationship building. They are especially adept at building and managing relationships with key stakeholders, including auditors, board members, and shareholders.
Key Skills
The reporting CFO believes integrity and compliance are the cornerstones of their role.
Consequently, they know regulations and compliance requirements inside and out and are the first to report on new developments in those arenas. They also maintain strict policies regarding financial reporting systems and regularly review reports for accuracy.
Many reporting CFOs are strong risk managers. They understand which internal and external factors may affect the company’s ability to maintain compliance or meet strategic goals.
Their bent toward relationship building makes them an excellent communicator with all stakeholders as well. As such, they’re a great choice for both internal presentations to the board and outward-facing financial communications such as earnings calls.
Personality and Leadership Style
The reporting CFO balances strong business and financial acumen but must be detail-oriented and methodical as they seek to uphold ethics. They champion transparent communication and accuracy across the board.
Typically, this means that the reporting CFO takes very few risks in their role. Instead, they keep their focus on maintaining financial and operational stability throughout the business.
Making Sense of the Operating CFO
Like the reporting CFO, the operating CFO deeply understands finance and reporting. However, their main goal is to apply an operational lens to everything they do as a leader.
Educational Background
The operational CFO also usually comes with an MBA. However, their focus may have been on business or operations instead of accounting. Because of their strategic outlook, this CFO may have sought out certifications and credentials related to project management, operational management, or specific ERP and technology platforms.
Core Experience
You may have guessed that a CFO who is so heavily focused on operations likely has extensive experience in that capacity. Typically, the operational CFO also takes on quite a bit of responsibility related to strategic planning and business and technology transformation.
Often, they have a history of leading the company to significant revenue growth by ensuring efficient operations. An operational CFO also understands how to cut costs without sacrificing agility or productivity.
Their expertise in producing operational efficiency means that these professionals have a great deal of experience with technology. They know how to use tools like ERP platforms that keep all departments running smoothly and allow leadership to obtain a timely and holistic picture of business health.
This CFO may have experience in optimizing supply chains and M&A activities. They have also probably taken on leadership roles in key operational areas like IT, HR, and procurement.
Key Skills
As a technology-focused leader, the operational CFO may be an expert in data analytics. They understand how to use the insights garnered from these platforms to facilitate data-driven decision-making.
To drive operational efficiency, these leaders are often adept at collaborating across teams and building working relationships with the other members of the C-suite bench. They also likely have a proven track record when it comes to optimizing costs while maintaining a focus on innovation.
Personality and Leadership Style
The operating CFO is much less conservative than the reporting CFO, as they look at many aspects of their role through the lens of company growth. Because they are more of a risk taker, the operating CFO is also agile and adaptable. They understand the necessity of keeping pace with change and are able to do so with little difficulty.
Rather than being policy-focused, the operating CFO chooses to lead with influence. They work to inspire those around them to move their teams toward positive change.
Aligning Leadership Choices With Organizational Goals Is Key
Choosing between a reporting CFO and an operational CFO can be challenging. Each comes with unique strengths and benefits. While the reporting CFO is focused on establishing and maintaining integrity and stability in financial and compliance management, the operating CFO is mainly concerned with growth and transformation.
For any given board, leadership decisions should always be based on the company’s needs, values, and goals. When you understand the differences in CFO profiles, you can ensure the best possible alignment to facilitate organizational success.
Top CFO Search Firm | Cowen Partners Executive Search
Our hands-on CFO executive recruiters have experience working with private, public, pre-IPO, and non-profit organizations. Clients are typically $50 million in revenue to Fortune 1000’s or have assets between $500 million to $15 billion.
Cowen Partners delivers 3X more qualified candidates than the competition. Through our proven retained executive search process, we find, vet, and deliver the top 1% of candidates for positions across the C-suite. Our process works for all industries, including technology, healthcare, manufacturing, retail, real estate, financial services, credit unions, private equity, and more.
Cowen Partners is the nation’s leading CFO search firm, driven to create value for our clients. Read more of our industry-leading retained search resources to see why Cowen Partners is a top CFO search firm, including tax and accounting leadership, in New York City, Chicago, Seattle, Anchorage, Atlanta, Dallas, Los Angeles, and beyond.
Schedule a Call.
Fill out the email request form to learn more about our approach.