When you consider hiring a CFO for a startup, you may also want to think about the other people who will help make that decision.
What is a CFO?
- Guiding company operations, including things like HR, IT, and other functions essential to running a business.
- Managing day-to-day finances, including cash flow, cash management, and compliance.
- Budgeting and forecasting, which provide the company with financial clarity and information to make and evaluate decisions.
- Financial reporting and compliance, including balance sheets, cash flow statements, and income statements help investors and stakeholders understand the company’s financial position.
So, who hires the CFO?
Typically, the board of directors and the CEO are going to make a decision in conjunction. Ultimately, the person that is going to make the final hiring decision is the CEO of the startup but, considering how important a role this really is, the board is going to have a lot of input. This is for a number of reasons, but mainly because those board members will also want to have a relationship with the CFO. This will benefit them if:
- They want to get the inside scoop when things aren’t going well.
- They need to check for transparency, to make sure issues aren’t being sugar coated.
- They need someone else they can talk to at the company, besides the CEO (think of it as a pressure release valve).
Does other employees get input into the CFO choice?
Frequently other employee do get input into the hiring process, including:
- The vice president of finance – This person is probably running accounting and finance before a CFO comes on board, so it’s a good idea to consider any insights the VP may have.
- Controller – This is someone who is responsible for accounting activities. The CFO will function as a leader and mentor to the controller, which meand the controller should have a voice in the hiring decision as well.
- Staff accountants – Staff accountants create and maintain financial records and statements, and they will be reporting to the CFO. Since this decision affects them, you may want to ask them to sit in on interviews and provide feedback.
How to hire a CFO for your startup
At any startup the final decision will always be made by the CEO. However, the board and the people who will report to that CFO should get input as well.
If you have other questions on hiring CFOs, taxes, startup accounting or even venture capital fundraising please contact us.