Middle market CEOs are often in a difficult position. They have grown their companies successfully, and now they need a real chief financial officer. Yet they often are not experienced enough in working with CFOs to know how to evaluate financial officers during the hiring process, or during actual performance on the job. Learning by trial-and-error is a very costly process, and most would prefer to learn from others’ experiences whenever possible.

Director’s Monthly, the newsletter of the National Association of Corporate Directors, surveyed a cross section of directors to find out how they feel about CFOs and their role in organizations. We think you’ll find the results helpful in your own assessment. The survey contained just 3 questions:

Survey Question 1. From the Board’s perspective, what are the skills and qualities you value most highly in a CFO? The principal answers, in ranked order: integrity – including candor, honesty and independence, communication skills, financial skills, team skills, strategic vision, and positive relationships with the financial community.

Survey Question 2. What skills and qualities are most often lacking in the CFO? The principal answers: comprehensive knowledge of the business, strategic vision and skills, communication skills, people skills, independence, and management skills.

Survey Question 3. What are the most critical roles of the CFO? The principal answers: evaluate and communicate results, manage financial health of the organization, understand and participate in strategic planning, ensure accuracy of reporting and ethical compliance, act as business partner/advisor to the CEO, and challenge management appropriately.

These results were not much different from a 1998 survey of CEOs by the same group. If you believe the findings are valid (and we do), then let us ask CEO readers 3 questions of our own:

Our Question 1. Do you actively and specifically take these or similar factors into account when you assess your CFO’s performance for your organization, or when you are in the market to hire such a person?

Our Question 2. Do you feel comfortable evaluating your CFO in such areas as financial skills, strategic planning skills, and ability to ensure accuracy of reporting?

Our Question 3. Do you permit, in fact require, your CFO to function with independence, challenging management when the CFO considers it appropriate, without exacting a price for not following the party line?

For an independent assessment of your financial department’s personnel, practices and procedures, consider us a resource to your board or to yourself. Call 310-645-1091 to learn more about this fast, powerful tool for evaluating your organization’s most critical technical department. Can you afford to wing it?