How CEOs Should Work With Their Finance Director

The relationship between a CEO and their Finance Director is one of the most important executive partnerships in a business, and one of the most often 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 the FD as a genuine commercial thinking partner. The result is an FD who produces excellent financial reporting but 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 relationship from the start, how to engage the FD in commercial decisions, the communication cadence, the board relationship and directors’ duties, when the FD should challenge the CEO, what to do when the relationship is not working, and when an interim or fractional FD is the right answer.

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, usually led by a Financial Controller. The FD’s contribution is: translating financial performance into insight the CEO and management team can act on; providing the financial challenge and rigour that improves commercial decisions; managing the relationships with investors, banks and external advisers; leading the annual planning and budgeting process; and being the board’s primary source of financial intelligence and financial governance. Our guide to what a Finance Director does covers the role in more detail.

A Finance Director who is doing the job well should make 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 picture — not just what happened last month but what the next three, six and twelve months look like. 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 conditions is not being met, the cause is worth diagnosing. It may be a capability issue with the FD. It may be structural — the FD is spending too much time on operational finance 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 of the CEO’s priorities and the specific financial challenges the business faces; explicit agreement on the FD’s scope and which decisions they can make independently; agreement on the reporting and communication cadence; and a clear understanding of the FD’s relationship with the board and the investors. Our Finance Director’s first 100 days guide sets out what a new FD should be doing over the same period.

The most common failure is the absence of an explicit conversation about scope. The CEO who expects the FD to ‘own the finance function’ without specifying what that means in practice creates ambiguity that usually resolves in one of two unsatisfactory ways: an FD who becomes 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; whether the FD can appoint external advisers without CEO sign-off; whether investor communication all goes through the CEO or the FD can deal directly with the fund’s portfolio team; hire and fire authority within the finance team; and the level of unbudgeted spend the FD can approve. Making these authorities explicit prevents the friction that arises when an FD either under-acts or over-acts relative to the CEO’s expectations.

A Simple Decision Rights Matrix

The clearest way to record the outcome is a one-page decision rights matrix, approved by the board and reviewed once a year. A typical split looks like this, with limits set to suit the size of the business:

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, a capital expenditure case — 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 analyse the target’s trading history, the financial risks in the sector and the implications of different integration scenarios, strengthening the CEO’s negotiating position. The FD who is involved in a new product launch from the concept stage can identify the assumptions the business case will need to test and the cost structure implications the commercial team may have underweighted.

The practical change is to bring the FD into strategic planning sessions, commercial team meetings and business development discussions as a matter of routine, rather than at the point when a model needs building. The FD who has been in the room understands the assumptions behind the model in a way that an FD handed a brief cannot, and the resulting model is more useful and more credible.

The CEO-FD Communication Cadence

The structured touchpoints typically include a weekly one-to-one, a monthly management accounts review in the week the accounts are produced, and the board pack preparation process, in which the FD prepares the financial section and the CEO contributes to the narrative. Alongside these, effective relationships have a high volume of informal communication — the FD flags a developing cash pressure before it appears in the accounts; the CEO shares a commercial development before it has financial implications. A fuller rhythm looks like this:

The weekly one-to-one is the most important structural element. It should cover the current trading and cash position; financial risks or opportunities that have emerged; the status of the month-end; investor, bank or adviser matters that need CEO awareness; and commercial decisions that need financial input in the coming week. A one-to-one that only reviews the management accounts is a reporting relationship. One that covers all five consistently is a genuine commercial partnership. For the board side of the cycle, see our guide to what the board actually reads in a board pack.

The FD, the Board and Directors’ Duties

Where the FD sits on the board as a statutory director, the CEO and FD are equals in law, whatever the reporting line says. Both owe the general duties set out in the Companies Act 2006, including the duty under section 172 to promote the success of the company for the benefit of its members as a whole, having regard to factors such as the long-term consequences of decisions, employees, suppliers and customers, and the company’s reputation for high standards of business conduct.

Section 174 requires directors to exercise reasonable care, skill and diligence, judged both against what can reasonably be expected of anyone carrying out that director’s functions and against the knowledge, skill and experience the director actually has. In practice, a qualified accountant serving as FD is held to the standard of a qualified accountant. That is why a good FD will insist on accurate information, proper minutes and time to review papers, and why a CEO should welcome it rather than see it as obstruction. The government’s summary of directors’ responsibilities is a useful starting point; specific questions should go to the company’s lawyers.

Not every FD is a statutory director: many carry the title without being registered at Companies House. That is a legitimate choice, but it should be deliberate, and the FD’s access to the board — attending meetings, presenting the financial section, meeting the chair and any audit committee — should not depend on it. The CEO should also accept that the FD will sometimes need a direct line to the chair or investors, particularly on going concern, covenant or control issues. A CEO who tries to filter everything the FD says to the board undermines both the FD and the board’s ability to rely on the numbers. Our page on what boards look for in a Finance Director covers the board’s side of the relationship.

When the FD Should Challenge the CEO

The best CEO-FD relationships rest on mutual respect for each other’s domain: the CEO takes the FD’s financial judgement seriously and will change a commercial position on well-evidenced challenge, and the FD respects the CEO’s commercial authority rather than trying to be the commercial leader. Within that, a CEO should expect — and want — challenge when:

• a decision would put cash runway or banking covenants at risk, or the forecast relies on assumptions the FD cannot support;
• a deal, price or contract has been agreed in principle before anyone has modelled it;
• targets given to investors or lenders are more optimistic than the internal forecast;
• there is pressure to change accounting judgements, provisions or revenue timing to hit a number;
• controls are being bypassed for speed, or the business is drifting into a regulatory, tax or solvency risk.

How the challenge is made matters as much as whether it is made. It should be raised privately first, backed by numbers, and come with alternatives. Once the decision is taken, the FD should support it unless it crosses a legal or ethical line — in which case escalation to the chair is the FD’s duty, not disloyalty.

What to Do When the Relationship Is Not Working

When a CEO-FD relationship is not working, identifying the cause quickly and addressing it directly is far more effective than allowing it to drift. The common failure modes are: the FD is operationally excellent but not credible at board level (a capability gap coaching rarely closes); the CEO does not give the FD enough authority or autonomy (a structural issue the CEO must fix); the two have fundamentally different risk appetites or priorities that create persistent conflict (a fit issue that may require a change of FD); or the FD’s technical depth does not match the business’s current complexity (an experience gap that needs a recruitment decision).

The key diagnostic question is whether the FD has been given a genuine opportunity to do the job, or has been constrained by limited authority, limited CEO engagement or limited access to commercial discussions. In many cases where a CEO has concluded the FD is not adding value, restructuring the relationship — expanded authority, earlier inclusion in commercial decisions, a direct investor relationship — produces the improvement without a recruitment process.

Working With an Interim or Fractional FD

Where the business cannot yet justify a full-time permanent FD, the relationship can work well with a Fractional FD — a qualified Finance Director working one to three days a week — or an Interim FD during a transitional period. The principles are the same as for a permanent FD: clear scope, appropriate authority, inclusion in commercial discussions and a regular cadence.

The adjustment for a fractional relationship is to focus on high-quality time rather than constant availability. The CEO should plan the commercial decisions, investor communications and financial challenges that need FD-level input for the FD’s days, rather than treating the FD as on call the rest of the week. CEOs who plan for the FD days and use them intensively get substantially more from the arrangement. See the Fractional Finance hub for more on the fractional model.

When to Consider an Interim or Fractional FD

• Fractional suits a growing business that needs board-level financial leadership for forecasting, funding and investor reporting but has a capable Financial Controller handling the day-to-day.
• Interim suits a gap or a spike: an FD has left, a fundraise, sale or refinancing is under way, a turnaround is needed, or a system change or audit problem needs senior attention for a few months.
• Permanent is usually right once the business needs FD-level judgement most days of the week, or investors expect a full-time FD on the board.

As a guide, a first permanent FD appointment typically costs £95k–£130k in base salary, while interim FDs typically charge £600–£1,100 a day in London and £450–£750 regionally. Comparing a fractional day rate with the full cost of a permanent hire — including employer National Insurance at 15% above £5,000 since April 2025, pension and bonus — is usually the quickest way to decide. Our guide to interim vs fractional finance sets out the trade-offs, and the Finance Director salary guide has fuller benchmarks.

Finance Director Performance Management

Many CEOs find it difficult to assess their FD, particularly without a finance background. The FD’s work is less visible than the sales team’s revenue or operations’ production metrics, and harder to quantify beyond ‘the accounts are accurate and on time’.

The most useful framework is a small set of specific, measurable objectives agreed in the first month. Examples might include management accounts delivered within six working days of month-end; the annual plan presented to the board by the agreed deadline; bank covenant compliance maintained throughout the year; audit completion within eight weeks of year-end; and one commercial initiative where the FD’s analysis contributed to a decision that improved financial performance.

The most important performance conversation is the six-month review, when both have enough experience of working together to judge whether the relationship is working and the FD’s priorities are aligned with the business. It should be structured, specific and honest: what has worked, what has not, and what needs to change. A relationship that develops a habit of direct feedback early is far more productive than one that accumulates unspoken frustrations.

When the FD Relationship Is Not Delivering

The signs typically emerge within the first twelve months: the CEO is still managing the bank, investor or audit relationships; commercial decisions are made without modelling, or with modelling the CEO does not trust; the management accounts still arrive late or with material errors; and the FD is absent from commercial conversations, either because they have not been invited or because they have not sought a place.

Before concluding that the FD is not right for the business, the CEO should check the conditions: clear authority over the finance function, early inclusion in decisions, the systems, team and budget to build the function the business needs, and clearly communicated expectations. If any of these has been missing, fix it first. Our guide on how to evaluate your finance function can help separate team and system problems from leadership problems.

Where the issue is genuinely capability — technical depth, commercial awareness or board presence — the right approach is a direct conversation about the gap, a specific development plan with a timeline, and an honest assessment of whether the gap can be closed within the business’s needs. If it cannot, a structured transition with appropriate notice is far better than a prolonged period of underperformance that damages both the finance function and the FD’s career.

Planning the FD Succession

The CEO who thinks about FD succession before the FD resigns is far better placed than one caught unprepared. The plan does not need a named successor; it needs an answer to the question: if the FD left today, what would we do? For most businesses the options are to promote the Financial Controller (only if they have the board-facing and strategic planning capability the role requires — see from Financial Controller to Finance Director); to appoint an Interim FD while running a permanent search, which is the most common approach; or to use a Fractional FD if the role can be reduced in scope during the transition.

The most expensive transition is the unplanned one, where the FD resigns suddenly and the business is left without FD-level leadership at a critical time. Interim candidates can usually be presented within days of a clear brief, so the gap is manageable — but the brief needs to happen at the point of departure, not after weeks of managing without cover. Keeping a short brief on file is the most practical preparation; our guide on how to brief an interim finance search shows what to include.

Frequently Asked Questions

How often should a CEO meet their Finance Director?

Weekly for a 30–45 minute one-to-one, monthly for the management accounts review, quarterly for the reforecast and strategy check-in, and annually for the budget and the FD’s own review — plus informal contact whenever cash or commercial news breaks.

Does the Finance Director report to the CEO or the board?

Day to day the FD usually reports to the CEO. If the FD is a statutory director they also share collective responsibility as a board member, and should have direct access to the chair on matters such as going concern, covenants and controls.

What duties does a Finance Director have as a company director?

The same general duties as every director under the Companies Act 2006, including promoting the success of the company (section 172) and exercising reasonable care, skill and diligence (section 174). Under section 174 a director’s own expertise raises the standard expected, so a qualified accountant FD is judged accordingly.

Should the FD ever disagree with the CEO in front of the board?

Disagreements should normally be raised privately first. But the board must be able to rely on the FD’s view, so where a material financial risk remains unresolved, the FD should say so to the board.

When is a fractional FD better than a full-time hire?

When the business needs FD-level judgement for planning, funding and investor reporting but not every day, and a Financial Controller can run the day-to-day finance. A permanent FD becomes the better option once that judgement is needed most days of the week.