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How to Hire a CFO in 2023

Even the most focused, disciplined hiring committee can run into challenges when trying to hire a CFO. The role of the CFO can vary hugely from company to company, so before searching for candidates, it’s important to define the parameters of the position. Moreover, in today’s competitive market, top candidates may be weighing multiple opportunities, making it even more crucial to find the right fit. Here are some of the most important factors to consider when you need to hire a CFO.

General Considerations When You Hire a CFO

Identifying core competencies – at Ellig Group, we encourage organizations to broaden their thinking when it comes to their executive search. When looking for a specific leadership role in an organization, we identify the “must have” versus the “nice-to-have” skills. Given the variability of the role, CFO search is an excellent opportunity to look outside the box of traditional pipeline pathways and prioritize candidates with the ideal skillset instead of focusing on previous job titles. This approach also has the benefit of opening the search to qualified diverse candidates, who are equally likely to possess the needed skills but less likely to have the traditionally desired job titles.

Diversity, Equity and Inclusion (DEI) ConsiderationsA report on DEI in finance and accounting by IMA (Institute of Management Accountants), CalCPA (California Society of CPAs) and IFAC (International Federation of Accountants), which surveyed 8,500 accountants and finance professionals, found that fewer than 60 percent of those surveyed found the profession to be equitable or inclusive. Forty-two percent of women surveyed reported they have left a company due to a perception of non-inclusiveness.

This is the case despite ample evidence that DEI is a business imperative. A Wall Street Journal analysis showed that the 20 most diverse companies in the S&P 500 have an annual stock return of 10 percent over five years, compared to 4.2 percent for their less-diverse competitors.

In Q2 2021, respondents to Deloitte’s CFO Signals survey said that of their direct reports who will be CFO-ready in three years, an average of 0.89 are minority, while an average of 2.09 are non-minority, and an average of 1.23 are women while an average of 1.66 are men.

Types of CFOs: Which one do you need?

The role of the CFO varies significantly from organization to organization. When you embark on the CFO recruiting process, it is important to have a sense of what kind of CFO your company needs. McKinsey research shows that CFOs generally correspond to one of four archetypes. This isn’t to say that there should be explicit rules about what the CFO will and will not do; however, a general idea of these profiles can be helpful in determining the skills and capabilities you are looking for in your search.

Generally, CFOs correspond to one of four subtypes, which we’ll refer to as: the Finance Veteran, the Swiss Army Knife, the Data Maven, and the Pivoter.

The Finance Veteran CFO is an expert in finance and accounting, usually with an advanced accounting degree or experience at an auditing firm. The Finance Veteran CFO is usually promoted from within, after years of serving as controller, treasurer, auditer, financial planner, or other finance role. This CFO archetype is particularly suited to teams without a centralized financial leadership or whose finance department is to some degree disorganized. This often means early-stage businesses, where they use their financial expertise in things like regulation and capital structure to build up and organize the financial department.

The Swiss Army Knife CFO has broad experience and may have experience outside the financial department. They often have MBAs rather than advanced accounting degrees and have worked in operations, marketing, or other management position. Rather than the high degree of technical skill offered by the financial whiz CFO, the Swiss Army knife CFO brings to the table management and communication proficiencies.

This archetype of CFO usually is suited for capital-intensive industries such as oil and gas, basic materials and telecommunications. They are usually at established companies, often in the financial sector. At these organizations, the Swiss Army Knife CFO is very involved in operations and strategy and is often being groomed for a CEO role.

The Data Maven CFO is an archetype of CFO usually found at highly diversified companies that require analytics to measure performance across their different holdings. They are also found at companies with scant resources, where they are in charge of cautious allocation. This type of CFO has a history of transforming organizations by focusing on metrics, implementing cost management, and standardizing data systems. The Data Maven CFO is usually an outside hire, often with international experience. 

The final subtype of CFO is what we are calling the Pivoter CFO. Found at organizations that pursue growth or transform their portfolio through M&A, the Pivoter CFO is an expert at M&A. Usually an outside hire, the Pivoter CFO uses their experience working as a CFO or as an investment banker, consultant or at private equity firms to implement dramatic changes at the company.

hire a cfo

CFO Executive Search

McKinsey proposes four questions that CEOs and boards should ask when starting the search for a new CFO. The first is: what are your aspirations and corporate strategy? If your company is planning an M&A program, you will likely want a candidate with M&A experience and market insight. You should also consider the industry you are in. Companies in the oil and gas industry and consumer packaged goods are more likely to hire internally someone with significant international experience. Meanwhile, companies with quickly evolving technology, such as pharmaceuticals and medical products (PMP) look for CFOs from outside the company, often with investment banking or general management backgrounds. 

The second question is: what is the composition of your top management team? At Ellig Group, we know that a potential candidate must complement the team that already exists at your organization. A new executive may even need to fill in the gaps or blind spots currently present in your team. Companies who have leaders who have deep knowledge of a specific area generally outperform those whose executives have a broad range of general knowledge. A company with an external hire CEO, for example, may need an internal hire CFO who has deep company knowledge, i.e. someone who fits the finance veteran CFO subtype.

The third question: what is the current level of capability in your finance function? Obviously, the CFO’s main responsibility is managing the financial actions of the company. If a company’s financial department is in disarray, or struggles to perform financially relative to their peers, they may want to look for a CFO with a great deal of experience in varied finance roles and with a track record of improving performance. If a company’s financial department is strong, they may want to consider a CFO with broader management skills or one with experience in strategy.

And the final question: what is the organizational and reporting structure of your company? Which areas report to the CFO? Does your company have solid-line or dotted-line reporting to the CFO? A large company with only dotted-line reporting to the CFO requires a CFO who can exert personal influence to be successful. You should also consider what the CFO in your organization is responsible for that does not rely on financial expertise. For example, if your CFO works with the IT department, you may consider someone with hands-on management skills who fits the profile of a Swiss Army Knife CFO.

More recent McKinsey research shows that the CFO role continues to evolve. The CFO’s role, in the wake of a pandemic, has shifted toward crisis management. CFOs are also increasingly responsible for their companies’ digital realm. More and more, finance departments are using AI tools and advanced analytics. Depending on the structure and needs of your organization, you may seek a CFO with the skills and capabilities needed to implement these new technologies. With investors increasingly interested in ESG concerns, you may also want to look for someone who is suited to align the goals of ESG programs with financial objectives. 

Why Ellig Group is the CFO search firm of choice

Ellig Group has a particularly strong network executive search track record in the finance space. This is a substantial advantage for companies seeking a CFO with financial services experience. We recognize that for any vacant position in the C-suite, we must fill it with someone who complements the existing leadership already present in the organization 

As a smaller, boutique firm, we will give personalized attention to your search. Every search is managed by CEO Janice Ellig, who has an extremely strong professional network and thus knows many exceptional candidates in various industries.

Ellig Group has a long history and track record of prioritizing DEI and succeeding. In the past decade, the number of CFOs who are women or who are racially or ethnically diverse (or both) has doubled. We can help you find the diverse talent that will help you remain competitive with, and outperform, your peers.

“All leaders need to recognize diversity is a business imperative,” Janice Ellig told CEO Weekly. In recent years, Ellig says, “[T]here is momentum, some of which was pressure from large institutional investors such as BlackRock, State Street, Vanguard; from regulatory bodies such as the SEC; from listing requirements for IPOs and Nasdaq; from social unrest including the murder of George Floyd; from quotas in place globally; and from the media about board diversity. This confluence of forces has created more intentionality by boards. That is good and that is progress, but . . . there is a need to push harder to ensure this is not just a moment in time, but a momentum in time.”

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Janice Reals Ellig

Chief Executive Officer

As the head of the Ellig Group, Janice is dedicated to increasing the placement of women and diverse candidates on corporate boards and in C-suites by 2025. Janice joined the legacy firm in 2000 and became Co-Chief Executive Officer in its transition to Chadick Ellig in 2007; she assumed sole ownership of the company as the Ellig Group in 2017 with a new focus on Reimagining Search. Prior to her career in executive search, Janice spent 20 years in corporate America at Pfizer, Citi and Ambac Financial Group, an IPO from Citibank, where she was responsible for Marketing, Human Resources, and Administration.

Heralded by Bloomberg Businessweek as one of “The World’s Most Influential Headhunters,” Janice is often consulted for her expertise and her commitment to gender parity, inclusion, and diversity. She frequently appears at speaking engagements and as a media guest, and she has penned multiple articles for outlets such as Directors & Boards, Directorship, Corporate Director, The Huffington Post, and Forbes.com. Janice also co-authored two books: Driving The Career Highway and What Every Successful Woman Knows, acknowledged by Bloomberg Businessweek as “the best of its genre.”

A tirelessly active member of the industry and champion of her causes, Janice is Founder of the Women’s Forum of New York’s Corporate Board Initiative and its signature event, Breakfast of Corporate Champions. Since 2011, Janice continues to spearhead this event to honor companies committed to board diversity and to encourage CEOs to sponsor board-ready women for the Women’s Forum database. (LINK: www.womensforumny.org).

Janice is personally committed to several NFP organizations: Board Director of the National YMCA and Past Chair of the YMCA Board of Greater New York; Trustee of the Actors Fund and Committee For Economic Development (CED); Incoming Chair, University of Iowa Foundation; Women’s Forum of New York Past President and Chair of the Corporate Board Initiative; member of the Steering Committee, US 30% Club and The Economic Club of New York.

In recognition for her many philanthropic activities, Janice received the University of Iowa Distinguished Alumni Award in 2011 and the Association of Executive Search Consultants (AESC) Eleanor Raynolds Award for Volunteerism in 2008. Named one of the “21 Leaders for the 21st Century” by Women’s eNews, she was also a recipient of the Channel 21 Award In Excellence for her contribution to “Excellence in the Economic Development for Women.”

“Listening to our clients’ needs, learning their business and understanding their culture is how we present the best talent and provide  a competitive advantage. We place candidates with the character, competencies, commitment, (intellectual) curiosity and courage to make a difference. Our goal is always to go beyond the expected and deliver valuable advice, measurable results and great talent!”

– Janice Reals Ellig

  • Champion of gender parity, diversity, and inclusion
  • Industry expert, speaker, and author
  • Founder of the Women’s Forum of New York’s Corporate Board Initiative
  • Committed board and committee member and philanthropist

T: (212) 688-8671 ext. 226
E: Janice@ElligGroup.com