You must identify the one person (or group) you can trust to give an accurate analysis of the financial results and strategy. The person must have outstanding technical skills so that financial statements accurately reflect the performance of the company. (The reflection of the results tells you “what.” The analysis is more important because it tells you “why.”) But that isn’t sufficient; the person must also:

  • Be above reproach ethically; reek with integrity; be impeccable in character (just like you are).
  • Be an effective two-way communicator.
  • Become a confident champion of the CEO’s vision and be able to turn it into action.
  • Have common sense.
  • Have a temperament and personal chemistry that works with the senior team.
  • Become someone you trust.
  • It’s a bonus if the person also is a strategic visionary.
  • Has experience in the industry.
  • Has to experience with the types of activities your organization is going through such as raising capital or IPO.
  • Is recognized as a reputable expert.
  • Has a sense of urgency to get the right stuff done.
  • Is able to deal with day-to-day operations, information technology, and human resources.

You want someone you can trust and not worry about the 100 things they are doing because you know they will be done in the manner you expect. The basic job of the CFO is to be totally skeptical as they manage money, get money, and hoard money. No doubt, fiscal conservativeness is good for sustainability.

A CEO who is a visionary probably would need a CFO who is conservative. Conservatism is one of the Generally Accepted Accounting Principles and must be followed when presenting financial information. Essentially, it says when in doubt, take the course that understates revenue and overstates expenses.

Right Advice

One CEO I interviewed told me about his early entrepreneurial days when he thought he’d cut corners and go without a CFO. He hired an office manager who proceeded to, among other things, not send in the payroll taxes. The IRS wasn’t too happy with him, “I learned a valuable lesson: You can go to jail without the right advice. Today I have a CFO who is also a CPA. He’s worked for a large corporation and had his own business. It’s nice security.”

The advice is very vital for our business. Also, where there is a need of the technical advice we must have the right people for the job.