2. What critical business decision, or two, did you make over the past few years, and what role did finance and the CFO play?
The answer to this question will pointedly tell you whether the CEO considers the CFO a strategic partner or the head numbers-cruncher.
3. Which financial statements do you focus on and how often do you read financial reports?
The CEO’s answer can reveal how much or little a driver of business decisions finance is and thus the CEO’s view of finance’s role in the organization. A CEO who reviews monthly reports and focuses on cash flow and profit margins is more likely to consider the CFO a strategic partner, because in such an organization, Liu says, “The CFO needs to deliver on shareholder value.” A CEO who skims quarterly reports with an eye to potential illegalities probably depends on finance and the CFO mainly for compliance.
4. Tell me about a conflict within the organization and how you handled it.
The answer to this question can tell you a lot about a CEO’s leadership style, whether the CEO’s approach to conflict is competitive, collaborative, or avoidance, according to Liu. Whether the answer satisfies the CFO depends on the CFO’s comfort level with any particular style. You may prefer a boss who makes decisions without too much discussion and moves on, or one who seeks buy-in from key participants, including the CFO. Collaboration can, of course, slip into avoidance, with no decision, or a poor one, ultimately being made.
5. Who are the key outside advisors influencing major decisions? And what’s the role of any outside accounting firms — what functions do they perform?
Often CEOs rely on outside advisors such as a former company CEO, a management consultant, or maybe even a spouse. You’ll want to know who else has the boss’s ear, and the quality of that advice, before accepting the job. As for outside accounting firms, does the CEO employ an outside firm for auditing and other traditional accounting functions, or does the CEO lean on the agency, like a crutch, to weigh in on business decisions? If it’s the latter, that’s probably a bad sign for the incoming CFO.
6. What are the company’s top business goals, what’s the strategy to achieve them, and how are you adjusting your strategy in light of current market conditions? And related to that: Who are your major competitors, why, and what is your organization’s competitive advantage?
These questions are designed to test the CEO’s business acumen. How well does the CEO understand his or her own business and business environment, and how well can the company compete? You should know the basic answers to these questions going into the interview; you don’t want the CEO to think you didn’t do your homework. So it’s best to preface the question with a statement indicating that you know the basics but would like a more in-depth discussion.
7. How many new SKUs (stock-keeping units) have you launched in the past year or two, and what new stuff in the pipeline?
This question gets to the pace of change and innovation in a company and in fact whether the company genuinely embraces change, says Schiff. (SKUs are common in consumer-product companies, but the concept can be applied to other companies by asking: How many new clients/customers have been acquired? How much key-client attrition have you experienced? Is the quality of client/customer improving?)
8. What are board and investor meetings like? Smooth sailing, or rough? And what pressures do you face from major shareholders?
The answer, Liu says, probes a major issue that CFOs face: the pressure to use accounting gimmicks in financial reports to make a company’s earnings and overall financial picture look better than they really are. “The more intense the climate, the more pressure there is to cook the books,” she says.
9. May I speak with the former CFO?
How else will you really find out where the bodies are buried?