Ask business owners what they want in a Finance Director and you’ll usually hear a fairly long list. We’ve already looked at [what businesses are asking for in a senior finance leader], so we won’t repeat it here.
Of course, the list is rarely where things go wrong. The trouble is that the person who ticks every box tends to cost more than the budget allows, or doesn’t live within an hour of your office.
So the more useful question is which parts of the list you’d give up.
What should you look for in a Finance Director?
Decide the two or three things the business needs from its finance leader over the next two years, and accept compromise on the rest. Technical depth, commercial judgement, sector knowledge, systems experience and leadership rarely come together in one person at the salary you’ve set. Settling the priorities gives you a faster search and a stronger shortlist.
That sounds obvious. In our experience it’s the step most often skipped, usually because everyone involved assumes they already agree.
Ask the CEO, the chair and the investor separately what the new Finance Director must do in year one. Do the answers match? If they don’t, it’s far easier to find out now than at the third interview.
Technical strength or commercial judgement?
Most businesses need both, but rarely in equal measure. If your reporting, controls or audit need fixing, technical strength comes first. If the numbers are sound and the business needs someone to shape pricing, funding and investment decisions, commercial judgement matters more. Be clear which problem you’re hiring to solve.
We’d be a little sceptical of the candidate who claims to be equally strong at both. More often, one side is a strength and the other is a work in progress, which is fine as long as you know which way round it is.
A good test is to ask what they’d fix first. A technical Finance Director will usually talk about the month-end, the controls and the audit. A commercial one will start asking about margins. Neither answer is wrong.
Which one you need depends on where the business is.
Does sector experience matter?
It helps, but it’s often overrated. A Finance Director from a business of your size and stage, with the same kinds of problems, will usually adapt faster than one from your sector who has only worked in larger, steadier organisations. Sector knowledge matters most where regulation, revenue recognition or stock is unusually complex.
This is the compromise we’d most often encourage. Insisting on sector experience can cut the shortlist in half before you’ve met anyone. And the person you lose might have been the strongest of the lot.
Of course, there are exceptions. A construction business with complex contract accounting, or a manufacturer with a lot of stock across several sites, may well need someone who’s seen it before. It comes down to how much time you can give them to learn.
How much does technology matter now?
More than it did. Finance teams increasingly expect their leader to understand automation, data and AI well enough to decide where to invest and where not to. Look for someone who has led a systems change before and brought the team along with them.
Deloitte’s Finance Trends survey found about two thirds of finance leaders plan to prioritise AI, automation and data skills over more traditional ones. That’s a striking number for a profession that has, perhaps, not always been first in the queue for new technology.
In practice, we’d ask candidates what they’ve changed. Has the month-end got faster on their watch? Did the new system go in on time? Was anyone still using it a year later?
System experience on a CV is useful. Those answers show what the candidate did with it.
Hands-on, or leading a team?
It depends on the team they’re inheriting. In a smaller business, your Finance Director may be running payroll and the VAT return as well as advising the board. In a larger one, they’ll lead managers who do that work. Candidates who are excellent at one are often unhappy in the other.
This is the trade-off people least like to talk about at interview. A candidate from a large group may say they’re happy to roll their sleeves up again. Some are. Others last about six months before they miss having a team.
So be specific about what the first year involves. Who closes the month? Who chases the debtors? Who writes the board pack? If the answer to all three is the new Finance Director, say so early.
How do you check what you’ve been told?
Take references by phone, and ask about specifics. What did this person change? How did they handle a difficult quarter, an audit issue or a disagreement with the CEO? Would the referee hire them again for a business like yours? At this level, a written reference rarely tells you anything the CV didn’t.
The relationships are the part we’d probe hardest. Gartner found new CFOs who took a deliberate approach to their stakeholder relationships were up to 50% more likely to make a successful transition. That research was about CFOs, but we’d be surprised if Finance Directors were any different.
So ask the referee who the candidate worked well with, and who they found harder. The answer is usually more useful than a list of strengths.
Before you start
The businesses that hire well at this level have usually made these decisions before the first interview. They know what they’d trade, and what they wouldn’t.
If it would help to test your thinking against the market, we’re glad to talk it through. We can look at what a strong Finance Director costs in your sector, who’s out there, and which compromises are likely to cost you least. You don’t have to be hiring to start that conversation.
