How CEOs Should Work With Their Finance Director

The relationship between a CEO and their Finance Director is the most important executive partnership in most businesses. It is also, consistently, one of the most underinvested. CEOs who are commercially excellent but less financially confident often treat the FD relationship transactionally — receiving the management accounts, reviewing the board pack, managing the bank relationship through the FD — without engaging with the FD as a genuine commercial thinking partner. The result is an FD who produces excellent financial reporting and management but who is not being used for the strategic financial leadership that the most valuable FD relationships deliver.

This guide is written for CEOs who have recently appointed or are working with a Finance Director, and who want to build the most productive possible working relationship. It covers how to set up the FD relationship from the start, how to engage the FD in commercial decisions, what to expect from the FD at different business stages, and the most common failure modes in the CEO-FD relationship.

What to Expect from a Good Finance Director

The Finance Director’s primary contribution is not the management accounts — producing those is the job of the finance team below the FD. The FD’s primary contribution is: translating the financial performance of the business into insight that the CEO and management team can act on; providing the financial challenge and rigour that improves the quality of commercial decisions; managing the relationships with investors, banks and external advisers; leading the annual financial planning and budgeting process; and being the board’s primary source of financial intelligence and financial governance.

A Finance Director who is doing their job well should be making the CEO’s life easier in four specific ways. First, the CEO should not need to worry about whether the financial information is accurate — the FD owns that. Second, the CEO should have a reliable forward-looking financial picture — not just what happened last month but what the next three months, six months and twelve months look like financially. Third, the CEO should not be managing the bank relationship, the audit or the investor reporting directly — the FD is the primary point of contact for all three. Fourth, when a major commercial decision is being considered, the CEO should have a financial model that quantifies the options before the decision is made, not after.

If any of these four conditions is not being met — if the CEO is still worrying about financial accuracy, managing the bank relationship, or making major commercial decisions without financial modelling — the FD relationship is not working as well as it should, and the cause is worth diagnosing. It may be a capability issue with the FD. It may be a structural issue (the FD is spending too much time on operational finance management that should be delegated to the FC). Or it may be a relationship issue — the CEO has not created the space or the mandate for the FD to operate at FD level.

Setting Up the Relationship From the Start

The most productive CEO-FD relationships are established clearly in the first thirty days. This means: a detailed discussion about the CEO’s priorities and the specific financial challenges the business faces; explicit agreement on the FD’s scope and what decisions they have authority to make independently versus which decisions require CEO input; agreement on the reporting and communication cadence (weekly one-to-one, board pack timeline, ad hoc communication protocols); and a clear understanding of the FD’s relationship with the board and the investors.

The most common failure to set up the FD relationship well is the absence of an explicit conversation about scope. The CEO who appoints an FD and then expects the FD to ‘own the finance function’ without specifying what that means in practice — which decisions the FD makes independently, which relationships the FD manages directly, which external commitments the FD can make on behalf of the business — creates ambiguity that typically resolves itself in one of two unsatisfactory ways: an FD who becomes too risk-averse and escalates everything to the CEO (recreating the CEO’s previous burden), or an FD who acts without sufficient CEO visibility and creates surprises in the investor or bank relationship.

The scope conversation should cover: payment authority limits (what the FD can authorise independently); external adviser appointment (can the FD appoint advisers without CEO sign-off?); investor communication (does all investor communication go through the CEO, or can the FD communicate directly with the fund’s portfolio team?); employment decisions in the finance team (does the FD have hire/fire authority for their direct reports?); and budget commitment (what level of unbudgeted spend can the FD approve?). Making these authorities explicit at the outset prevents the relationship friction that arises when an FD either under-acts or over-acts relative to the CEO’s expectations.

Engaging the FD in Commercial Decisions

The most underused dimension of the CEO-FD relationship is the FD’s involvement in commercial decisions. Most CEOs involve their FD in financial decisions — the budget, the pricing model, the investment case for a capital expenditure — but fewer involve the FD in the early stages of commercial decisions before the financial dimensions have crystallised. This is a missed opportunity.

The FD who is involved in a potential acquisition from the earliest stage — before a price has been discussed — can provide financial analysis of the target’s trading history, the financial risks in the sector, and the financial implications of different integration scenarios that will improve the CEO’s negotiating position and the quality of the investment decision. The FD who is involved in a new product launch from the concept stage — before the commercial team has built the business case — can identify the financial assumptions that the business case will need to test and the cost structure implications that the commercial team may have underweighted.

The practical change the CEO needs to make is to include the FD in commercial conversations earlier rather than later — to invite the FD to strategic planning sessions, commercial team meetings and business development discussions as a matter of routine rather than bringing them in at the stage when the financial model needs to be built. The FD who has been in the room for the commercial discussion understands the assumptions behind the financial model in a way that the FD who is given a brief and asked to build the model cannot, and the model that results is consistently more useful and more credible.

The CEO-FD Communication Cadence

The communication cadence between CEO and FD typically includes a weekly one-to-one (thirty to forty-five minutes), the monthly management accounts review (typically sixty to ninety minutes in the week the accounts are produced), and the board pack preparation process (which involves the FD preparing the financial section and the CEO reviewing and contributing to the narrative). Alongside these structured touchpoints, effective CEO-FD relationships have a high volume of informal ad hoc communication — the FD flags a developing cash pressure before it appears in the management accounts; the CEO shares a commercial development before it has financial implications; both parties discuss the investor relationship and the bank relationship proactively rather than reactively.

The weekly one-to-one is the most important structural element of the relationship. It should cover: the current trading position and cash position; any financial risks or opportunities that have emerged in the past week; the status of the current month-end and any issues that are developing; any investor, bank or adviser relationship matters that require CEO awareness; and any commercial decisions that need financial input in the coming week. The one-to-one that only covers the management accounts review is a reporting relationship, not an FD relationship. The one-to-one that covers all five of these dimensions consistently is a genuine commercial partnership.

What to Do When the Relationship Is Not Working

Not every CEO-FD relationship works well, and when it does not, identifying the cause quickly and addressing it directly is significantly more effective than allowing it to drift. The most common failure modes are: the FD is operationally excellent but does not operate at board level credibly (a capability gap that cannot be addressed through coaching); the CEO does not give the FD sufficient authority or autonomy to do the FD role effectively (a relationship and structure issue that the CEO needs to address); the FD and CEO have fundamentally different risk appetites or strategic priorities that create persistent conflict (a cultural fit issue that may require a change of FD); or the FD’s technical quality is not sufficient for the business’s current financial complexity (a qualification and experience gap that a recruitment decision is required to address).

The most important diagnostic question is: has the FD been given a genuine opportunity to do the FD job, or have they been constrained — by limited authority, limited CEO engagement, limited access to the commercial and strategic discussions — in a way that prevents the relationship from working regardless of the FD’s capability? In many cases where a CEO has concluded that their FD is not adding value, a restructuring of the relationship — expanded authority, inclusion in commercial discussions, a direct investor relationship — would produce the performance improvement they are seeking without requiring a recruitment process.

Working With an Interim or Fractional FD

Where the business is not yet ready for or cannot yet justify a full-time permanent FD, the CEO-FD relationship can be established effectively with a Fractional FD — a qualified Finance Director who works for the business one to three days per week on a retainer basis — or an Interim FD during a transitional period. The principles of the relationship are the same as for a permanent FD: clear scope, appropriate authority, inclusion in commercial discussions and a regular communication cadence.

The specific adjustment for a fractional relationship is the importance of focused, high-quality time rather than constant availability. The Fractional FD who is present two days per week needs those two days to be as productive as possible — which means the CEO should prioritise the commercial decisions, investor communications and financial challenges that need FD-level input for those days rather than distributing them across the week. The CEO who treats the Fractional FD as available on call when not on-site will consistently under-value the relationship. The CEO who plans specifically for the FD days and uses them intensively will get substantially more value from the fractional arrangement. See the Fractional Finance hub for more on the fractional model.

Finance Director Performance Management

Many CEOs find it difficult to assess and manage the performance of their Finance Director, particularly where the CEO does not have a strong finance background. The challenge is that the FC or FD’s work is less visible than the sales team’s revenue numbers or the operations team’s production metrics — it is harder to quantify what the FD is contributing beyond ‘the accounts are accurate and on time.’

The most useful framework for Finance Director performance management is a small set of specific, measurable objectives that reflect the FD’s primary contribution areas — ideally agreed in the first month of the appointment. Examples might include: management accounts delivered within six working days of month-end (timeliness and control quality); annual financial plan completed and presented to the board by the agreed deadline (planning and board relationship); bank covenant compliance maintained throughout the year (treasury management); audit completion within eight weeks of year-end (external relationship management); and one specific commercial initiative where the FD’s financial analysis contributed to a decision that improved the business’s financial performance (commercial contribution).

The most important performance management conversation with the FD is the six-month review — the point at which both the CEO and the FD have enough experience of working together to make a genuinely informed assessment of whether the relationship is working and whether the FD’s priorities are correctly aligned with the business’s needs. This conversation should be structured, specific and honest: what has worked well, what has not worked well, what needs to change in the next six months. The CEO-FD relationship that develops a culture of direct, honest performance conversation in the first six months is significantly more productive than one that avoids difficult feedback and accumulates unspoken frustrations over time.

When the FD Relationship Is Not Delivering

The signs that the CEO-FD relationship is not delivering at the level the business needs typically emerge within the first twelve months and include: the CEO continuing to manage financial relationships (bank, investors, auditors) that the FD should own; commercial decisions being made without financial modelling or with modelling that the CEO does not trust; the management accounts still arriving late or with material errors despite the FD being in post; and the FD being absent from commercial conversations because they have not been included or because they have not sought to be included.

Before concluding that the FD is not right for the business — a conclusion that should trigger a recruitment process — it is worth asking whether the CEO has given the FD the conditions to succeed. Has the FD been given clear authority over the finance function? Have they been included in commercial decisions from an early stage? Have they had the technology, the team and the budget to build the finance function that the business needs? Have the performance expectations been communicated clearly and specifically? If the honest answer to any of these is no, addressing the condition is the right first step before concluding that the FD is the problem.

Where the diagnosis is genuinely a capability issue — the FD does not have the technical depth, the commercial awareness or the board presence the role requires — the most effective approach is a direct conversation with the FD about the gap, a specific development plan with a clear timeline, and an honest assessment of whether the gap can be closed within the business’s requirements. If it cannot, a structured transition — with the FD’s agreement and with appropriate notice — is significantly better than a prolonged period of underperformance management that damages both the finance function and the FD’s career.

Planning the FD Succession

The CEO who thinks about the FD succession proactively — not just when the FD resigns — is consistently better positioned to manage the transition than the CEO who is caught unprepared by an FD departure. The succession plan does not need to be a specific named successor; it needs to be an answer to the question: if the FD left today, what would we do? For most businesses, the answer involves one of three options: promote the Financial Controller to FD level (only if the FC has the board-facing and strategic financial planning capability the FD role requires); appoint an Interim FD while running a permanent search (the most common approach, which provides financial leadership continuity while the permanent search runs); or appoint a Fractional FD temporarily if the FD role can be reduced in scope during the transition.

The most expensive FD transition is the unplanned one — where the FD resigns suddenly, the CEO has not thought about succession, and the business is left without FD-level financial leadership at a critical time. Accountancy Capital can typically provide an Interim FD within one to two weeks of a brief, which means the gap between FD departure and Interim FD start is manageable — but the brief needs to happen immediately at the point of the FD’s departure, not after two weeks of managing without FD cover. Having Accountancy Capital’s contact details ready — and a clear brief that can be communicated quickly — is the most practical preparation for an unexpected FD departure.