What to Look for When Hiring a CFO

The CFO appointment is the most consequential finance hire a business makes. It sits at the intersection of financial strategy, capital structure, investor relations and operational finance leadership in a way that no other role does. A strong CFO builds the financial infrastructure, investor confidence and commercial rigour that enables the business to grow. A poor hire at this level — or a hire that is technically strong but wrong for the specific business context — can set the business back by years.

This guide is written for CEOs, founders and boards who are making a CFO appointment, whether for the first time or as a replacement for an outgoing CFO. It covers the profile that genuinely matters at CFO level, the competencies that distinguish exceptional candidates from merely strong ones, the salary landscape, the interview structure, and the common mistakes that lead to a failed appointment.

What a CFO Does That a Finance Director Does Not

In many UK businesses, the titles CFO and Finance Director are used interchangeably and describe similar roles. But in businesses of significant scale — typically £50m revenue and above, or PE-backed businesses of any size — the CFO carries a distinct set of responsibilities that go beyond the standard Finance Director scope.

The CFO is typically a member of the executive leadership team with a seat at the strategic table alongside the CEO and COO. They own the capital structure of the business — the debt, the equity, the working capital management — not just the financial reporting. They manage the relationship with the PE sponsor or institutional investor not just as a reporting exercise but as a strategic partnership. They lead M&A processes, fundraising rounds and exit preparation with a level of personal ownership that an FD in a smaller business typically does not carry. And they are often a public face of the business to lenders, rating agencies and, in listed companies, to equity analysts and institutional investors.

The distinction is important for hiring because the CFO profile — both experience and personal style — is meaningfully different from the FD profile. A very strong Finance Director with an excellent track record at SME and mid-market level may not be the right CFO for a PE-backed business raising its second round. Assessing candidates against the actual demands of the CFO role rather than a generic “senior finance leader” brief is essential.

The Six Competencies of an Exceptional CFO

1. Capital Structure Mastery

A strong CFO understands the business’s capital structure intimately — the leverage, the cost of capital, the optimal debt-equity mix for the current stage of the business, and the implications of different financing decisions on the equity return. They can have a sophisticated conversation with a lender about covenant structure, with a PE sponsor about the implications of add-on financing on the cap table, and with the board about the optimal capital allocation between growth investment and debt service. This is not merely FD-level finance expertise — it is a commercially and financially sophisticated understanding of how capital decisions drive equity value.

2. Investor and Lender Relationship Management

The CFO is typically the primary finance relationship for the business’s investors and lenders. In a PE-backed business this means managing the relationship with the PE firm’s deal team and portfolio operations team, producing the management reporting pack the investor relies on, managing covenant conversations with the bank, and maintaining investor confidence through difficult periods as well as strong ones. Probe for specific examples of managing investor relationships under pressure — a missed budget, a covenant stress event, a market downturn — not just under benign conditions.

3. Transaction Experience

CFO-level candidates in most PE-backed and growth-stage businesses are expected to have meaningful transaction experience: leading financial due diligence on an acquisition, managing the financial workstream of a fundraising, preparing the financial elements of a vendor due diligence report, or working through the financial aspects of an exit. Transaction experience at this level is built through doing it — it cannot be substituted by general finance expertise however deep. Where the CFO will be leading the business’s next transaction, their specific transaction track record should be assessed with care.

4. CEO Partnership

The CFO-CEO relationship is the most important working relationship in the executive team. A CFO who provides genuine commercial challenge — questioning assumptions, presenting the financial consequences of strategic choices, pushing back on plans that do not add up financially — while maintaining the trust and confidence of the CEO is a significant source of strategic value. A CFO who defers to the CEO on everything provides the comfort of agreement but not the value of independent financial perspective. Probe for specific examples of where the candidate disagreed with the CEO or board on a financial matter, how they expressed that disagreement, and what happened.

5. Finance Function Leadership

The CFO is responsible for the quality and capability of the entire finance function, including the Financial Controller, FP&A, FBP, tax and treasury teams that report through them. Their ability to recruit, develop and retain strong finance professionals is a core part of their long-term value. A CFO who is technically strong but cannot build a team beneath them will be a bottleneck rather than a multiplier. Ask for specific examples of finance professionals they have developed and what became of them.

6. Intellectual Honesty Under Pressure

The CFO is the person in the business who must be willing to say things that are difficult to hear — that the budget is unrealistic, that a proposed acquisition does not add up, that the business is burning cash faster than the plan assumed. The ability to communicate difficult financial truths clearly and calmly, while maintaining credibility with the CEO, the board and the investors, is perhaps the most important personal quality of an effective CFO and the hardest to assess in an interview. The quality of the candidate’s examples of handling difficult financial conversations — not their claims about doing so — is the best available test.

Salary and Package Benchmarks for CFOs in 2025

Equity participation — typically structured as growth shares, sweet equity or EMI options in PE-backed and growth businesses — is a significant and often determining component of the CFO total package. The value of this equity is impossible to estimate without understanding the business’s valuation, the equity plan terms and the exit timeline. When assessing competitiveness of a CFO package, the equity component needs to be modelled explicitly using realistic exit scenarios rather than treated as an optional extra.

The CFO Interview Process

A CFO search process should be more extensive than the standard two-stage interview used at FC and FD level. The typical CFO process includes:

Initial conversation with the CEO: 60–75 minutes covering the candidate’s background and the business context. The CEO should be assessing personal chemistry and strategic alignment as much as technical capability. A CFO who does not intellectually engage the CEO from the first conversation is unlikely to become the strategic partner the role requires.

Board or investor meeting: for a PE-backed business, the PE sponsor’s involvement in the CFO hiring process is typically expected and should be structured early rather than treated as a final veto. The CFO will work more closely with the PE operating partner than almost any other executive, and a genuine fit assessment between the CFO candidate and the investor’s operating team is in everyone’s interest.

Commercial and financial presentation: at CFO level, a substantive presentation on the business’s financial strategy — or a specific strategic challenge — is standard. This is the most effective differentiator between candidates who are intellectually engaged with the business and those who have prepared for the process in a more superficial way. Allow 30–45 minutes for the presentation and the discussion that follows.

Deep-dive reference conversations: at CFO level, references should be taken from people who have genuinely worked alongside the candidate in a demanding situation — a PE sponsor from a previous portfolio company, a CEO through a difficult period, a banker who managed the refinancing. These conversations will reveal the candidate’s conduct under pressure in a way that no amount of competency questioning can replicate. The ICAEW, ACCA and CIMA member directories allow qualification verification as a baseline check alongside the reference conversations.

The Most Common CFO Hiring Mistakes

Hiring a strong FC for a CFO role. The most common CFO hiring mistake is promoting or appointing a candidate who is technically excellent at FC level but has not developed the strategic, investor-facing and commercial leadership skills the CFO role requires. Technical depth is necessary but not sufficient at CFO level. A candidate who has been an outstanding Financial Controller but has never managed an investor relationship, led a fundraising or produced a board-level financial narrative may struggle significantly in the CFO seat.

Prioritising sector experience over leadership quality. CFO-level leadership skills transfer more effectively across sectors than FC-level technical skills. A CFO who has built exceptional investor relationships, led multiple fundraisings and managed a PE sponsor through a difficult period in financial services will typically transition successfully to technology or healthcare. Weighting sector experience too heavily at CFO level can unnecessarily narrow the candidate pool and produce a technically credible but strategically limited shortlist.

Not involving the investor in the process. In a PE-backed business, a CFO hired without meaningful PE sponsor engagement is a CFO the PE firm did not choose. Even where the PE firm is not a formal signatory to the appointment, their active involvement in the assessment — meeting the candidates, providing a view on cultural fit with the operating model — is important for the CFO’s ability to manage that relationship effectively from day one.

Moving too slowly at offer stage. CFO-level candidates at the quality required for a demanding PE-backed or growth business are typically in multiple processes. A two-week gap between final interview and offer — while internal alignment or approval processes run — will consistently lose the preferred candidate to a faster-moving competing process. The decision, the verbal offer and the written terms should follow the final interview within five working days.

Further Reading

• Companies Act 2006: Directors’ General Duties — the statutory duties of a CFO appointed as a director of the company.
• FRC: UK Corporate Governance Code — governance standards relevant to board-level CFO appointments.
• ICAEW: Finance Function Leadership — guidance on how the CFO role sits within and leads the broader finance function.
• CIMA: Finance Transformation — research on how the CFO role has evolved and what best-in-class finance leadership looks like at scale.
• HMRC: Off-Payroll Working (IR35) — relevant for interim CFO engagements and employment status determination.