How to Hire a CFO

Last Updated Oct 21, 2008 12:12 PM EDT

If you are a CEO, at some point you may need to consider hiring or replacing your chief financial officer.
If you are a small business whose sales are topping $5 million, it is probably time to think about hiring a CFO.

Or, given the financial crisis, it could be that your current CFO does not have the skill set needed to hack the new demands, such as understanding the broad capital market rather than merely navigating the shoals of Sarbanes-Oxley.

"I feel sorry for the CFOs. They need to be chameleons," Chuck Eldridge, an executive at Korn/Ferry International told Chief Financial Officer magazine. "One day they are focussed on growing the business, the next day on the credit crisis or on how to turn around the company."

So, if you are in the market for a CFO, here are some things to consider:

  • Understand what you want your new CFO to do. Read widely, talk to other CEOs and consider hiring a search firm. Know your pay limits. Consider consulting with an experienced venture capital company if you are growing and need a CFO for the first time.
  • Advertise in trade journals or online. Don't bother with the local newspaper.
  • Narrow your field of candidates. Select the strongest.
  • During interviews, give candidates real-life situations to evaluate. Look for individuals capable of strong strategic planning.
  • Let the best prospects meet your board and key executives.
  • When you have narrowed the list to three, trust your gut.