CFO executive search

A chief financial officer search is the one most often started a round too early and finished a round too late. The brief that fits a company at Series A is wrong by Series B, and the person who can take a business through an audit, a debt facility and an exit is a different person from the one who built the first model. Writing down which of those the next three years need is most of the work.

The UK market charges 25 to 33 per cent of first-year salary for retained search and 15 to 25 per cent for contingency. What sits inside that number is set out openly, which is unusual in this market and deliberate.

What changes when the seat is the CFO

Stage decides the candidate pool before the salary does

Pre-revenue to Series A wants a finance leader who can build a model and controls with no team. Series B to D wants somebody who has run a function, hired a controller and a financial planning lead, and reported to a board monthly. A pre-exit company wants somebody who has sat through diligence on the selling side. These are three different markets of people with three different reference lists, and a search that does not name which one it is in approaches the wrong hundred.

The qualification question is real and it is not the whole answer

ACA, ACCA and CIMA are the UK letters, and most companies past twenty people want one of them, because auditors, banks and acquirers will ask. A chartered accountant who has never forecast a runway is still the wrong hire for a venture-backed company, and an investment banker without the letters may be the right one for a company heading to a sale. Decide which matters here and write it in the brief rather than leaving it to the longlist to settle.

Candidates assess the numbers before they assess the role

A serious CFO candidate will want the management accounts, the cash position and the cap table before a final interview, and will read them properly. A company that is cagey loses the good ones, who conclude there is something to hide, and keeps the ones who did not ask, which is its own signal. Decide at kickoff what is shared under NDA at which stage, and share it.

The finance director already in the building is part of the search

Many companies hiring a first CFO have a financial controller or finance director who has carried the function so far. Whether that person is a candidate, becomes the new CFO's deputy, or leaves, has to be settled before approaches start, because candidates will ask who is in the team and the answer changes who accepts.

The process, where it differs

Brief by stage

Which of the three CFO markets the company is in, written down with the next three years' events: raise, facility, audit, acquisition, sale.

Map

Sitting and recent CFOs in companies of the same stage and sector, plus the deputies ready to step up, which is where most first CFOs come from.

Approach

Direct, with the stage, the funding position and the reporting line stated. A CFO candidate who learns the runway in week two withdraws in week three.

Assess

A case on the company's own numbers under NDA, a board member in the final round, and references that include an auditor or an investor rather than only former colleagues.

Base, bonus, equity and the start date agreed as a set. CFO notice periods in the UK run three to six months, so the start date is part of the offer.

What to ask a search firm

Which stage of CFO do you think we need, and what in our numbers tells you that?
How many CFOs have you placed into companies at our stage in the last two years, and are any still in the seat?
Will you approach sitting finance directors ready to step up, or only people who already hold the title?
How do you reference a CFO beyond former colleagues?
What is a realistic start date given notice periods, and what covers the seat until then?

Where it goes wrong

Briefing for the CFO the company needed two years ago
Insisting on a qualification the role does not use, or waiving one the auditors will ask for
Withholding the management accounts from a final-round candidate
Leaving the sitting finance director's position unresolved until the offer
Forgetting that a six-month notice period means the seat is empty until spring

When a search is the wrong instrument

If the real requirement is a model, a board pack and a monthly close, that is two days a week of judgement rather than a full-time officer, and a fractional CFO fills it in days at a fraction of the loaded cost. Many permanent CFO searches should start as fractional cover and convert once the seat has proved it needs five days.

Common questions

How long does a CFO search take in the UK?

Twelve to sixteen weeks from brief to accepted offer is normal for a retained search, then the notice period, which for a sitting UK CFO is three to six months. A company starting in January should expect the person at a desk by late summer, which is why fractional cover during the search is standard.

What does a CFO executive search cost?

The UK market charges 25 to 33 per cent of first-year earnings for a retained CFO search, so a £150,000 base with a bonus is a five-figure fee, usually billed in three stages. Contingency recruiters charge 15 to 25 per cent on placement only, and rarely reach sitting CFOs who are not looking.

Does a CFO need to be a chartered accountant?

Not by law, and not always in practice. Companies with audits, lenders or an acquirer in view usually want ACA, ACCA or CIMA because those parties will ask. Venture-backed companies raising rounds often prefer somebody who has modelled and raised, with a strong controller underneath. The brief should say which it is.

Should we hire a finance director or a CFO?

A finance director in UK usage runs the function and the reporting; a CFO also owns capital, the board relationship and the strategic number. Companies under about £10 million of revenue that are not raising usually need the first. Companies raising, borrowing or selling need the second, and the title matters to the candidates who can do it.

Two ways in

Permanent, or the part-time version first

Retained search runs a full-time appointment end to end. Operator Search answers the same brief fractionally in five business days, which is usually the faster way to find out whether the seat is real. Or browse the bench and approach somebody direct at no cost.

How to Recruit a CFOWhat the seat needs to own, how to test for it in an interview, what the hire costs fully loaded, and when a fractional CFO is the better answer.Fractional to Full-Time: When and How to Convert the Executive in the SeatThe signals that a fractional seat has become a full-time one, how to make the offer to the person already in it, what changes in pay and contract, and when to search instead.How to Brief an Executive Search Firm So the Search Starts RightWhat a search firm needs from you before approaching anyone: the scope, the package, the decision-makers, the no-go list and the timeline, with the questions a good firm will ask back.