When a CFO search goes wrong, it rarely goes wrong at the shortlist. It goes wrong in the first meeting, when the brief is written by the chief executive alone and the audit committee meets the finalists for the first time a fortnight before the offer.
We have run 74 CFO searches since 2009. In the ones that stalled late, the pattern was almost always the same: a candidate the CEO wanted, and an audit chair with questions nobody had thought to ask at the start.
Two clients in the same room
A CFO reports to the chief executive day to day. But in a listed company, or a PE-backed business with a serious board, they answer to the audit committee on the things that end careers: controls, judgements on revenue recognition, the relationship with the external auditor, the going concern statement.
The CEO tends to brief for commercial partnership. Someone who can support a growth plan, talk to investors and run a finance function without drama. The audit chair is briefing, often silently, for something else: judgement under pressure, and the willingness to say no to the chief executive.
Both are right. The problem is that only one of them usually writes the brief.
What the audit chair adds
When we bring the audit chair in at the start, the brief changes in specific and useful ways. Across our last twenty CFO assignments where this happened, the audit chair added at least one of the following to the specification:
Experience of a difficult audit. Not necessarily a qualified opinion, but a year where the auditor and management disagreed and the CFO had to hold a position.
Controls maturity. Whether the business needs someone who has built a control environment from scratch, or someone who can run one that already works.
Restatement and disclosure history. Direct questions about prior roles, asked early rather than discovered in referencing.
Board temperament. How the candidate behaves when a non-executive pushes back in committee, which is different from how they present to a CEO.
None of these are exotic. All of them are hard to assess late in a process, when a preferred candidate has emerged and there is momentum behind them.
How co-ownership works in practice
Co-owning the brief does not mean the audit chair runs the search. It means three concrete commitments.
A joint briefing meeting
We meet the CEO and the audit chair together, for ninety minutes, before anything is written. Where they disagree on priorities, we want to hear it then, not in week six.
Shared sign-off on the specification
The written brief goes to both. We ask each of them to rank the same five criteria independently, then compare. Where the rankings differ by more than two places, we go back and resolve it before research begins.
An early audit chair interview
The audit chair meets the shortlisted candidates, usually four or five people, at first interview rather than final. It adds about a week to the process. It removes most of the late surprises.
The cost of leaving it late
Last year we ran a search for a PE-backed industrial group where the audit chair joined only at the final stage. The CEO’s preferred candidate was commercially strong and had a good reference from his current chair. The audit chair asked about a prior-year inventory adjustment, the candidate answered poorly, and the process restarted. Eleven weeks were lost, and the second-choice candidate had accepted another role in the meantime.
On a comparable search this spring, for a listed business services company, the audit chair was in the first meeting. She added two criteria the CEO had not considered, and screened out one candidate at first interview for reasons that would otherwise have surfaced much later. The offer was accepted on day 58.
What we now ask for
For every CFO search, we ask the client for the audit chair’s name and diary before we accept the brief. Occasionally a CEO resists, usually because the relationship with the committee is already strained. That is useful to know too, and it is far better learned in week one than in week ten.
The appointment is the board’s decision. The brief should be as well.
