How to Hire a CFO: A Guide for UK Companies

How to Hire a CFO: A Guide for UK Companies

Hiring a CFO is one of the appointments where the gap between what the firm thinks it needs and what it actually needs is often widest. The role has shifted substantially over the past two decades — from a back-office reporting function to a strategic seat at the executive table — and the candidate market has shifted with it. The CFO at a £30m owner-managed business is doing a fundamentally different job from the CFO at a £300m PE-backed group, and the candidate who is right for one is rarely right for the other. Boards approaching their first CFO appointment, or refreshing the role after several years, benefit from thinking through what the CFO is actually for at the firm before the search begins, not in the middle of it.

This guide is written for chairs, CEOs, founders and shareholders working through CFO succession at UK businesses. It sets out the orientation: when the firm genuinely needs a CFO (and when a finance director is the right answer instead), what the role covers, what the candidate pool looks like at different company stages, and how the search process should run. CFO recruitment is the specialism of our sister firm FD Capital — also led by Adrian Lawrence FCA, also operating as an ICAEW-Registered Practice — and the depth content on CFO hiring lives there. This Exec Capital pillar covers the cross-portfolio orientation; for the substantive depth, FD Capital is the destination.

When does a firm need a CFO?

Not every firm needs a CFO. Many UK businesses operate effectively for years with a finance director, a financial controller, or an outsourced finance function — and the decision to upgrade the finance leadership to CFO level should be deliberate rather than aspirational. The question is not whether the firm could benefit from a CFO but whether the firm has the size, complexity and strategic direction that justifies the appointment.

Five triggers typically signal the move from finance director to CFO is warranted.

Scale and complexity. Revenue past £15-20 million, multi-entity or multi-jurisdiction structure, material institutional finance arrangements, growing customer or market complexity. At this scale the finance function needs strategic leadership, not just competent reporting.

Investor or capital structure changes. PE investment, debt facility expansion, preparation for sale or IPO, group restructuring. These events introduce reporting, compliance and strategic finance demands that move beyond a finance director’s typical scope.

Strategic transition. Acquisition activity, international expansion, major capital allocation decisions, business model evolution. The CFO becomes the partner to the CEO on these decisions in a way the finance director typically does not.

Regulatory or compliance demands. FCA-regulated firms with SMF2 (Chief Finance Function) responsibility have a baseline regulatory expectation of senior finance leadership. Firms approaching audit for the first time, or facing complex tax or accounting treatment, are similar.

Post-crisis or post-failure rebuild. Firms that have experienced financial control failures, fraud, misstatement or regulatory action typically need senior finance leadership to rebuild credibility with auditors, lenders and investors.

Where none of these triggers applies, a finance director or financial controller is often the right answer rather than a CFO. The boundary between FD and CFO is real but practical — the CFO is more strategic and is typically a board member; the FD is more operational and may not be on the board. FD Capital’s distinction between CFO and Finance Director covers the boundary in detail.

What the CFO actually does

The modern UK CFO role typically covers four substantive areas, with the proportions varying by company stage and ownership structure.

The integrity of the financial reporting and control framework. The foundational responsibility — that the firm’s books are accurate, the controls work, the audit goes well, and the financial reporting to internal and external stakeholders is reliable. This is the part of the role that least tolerates failure: a CFO who delivers strategic insight but cannot keep the financial control framework intact rarely lasts long in the role.

Strategic financial leadership. Capital allocation, investment appraisal, pricing strategy, working capital management, financial modelling for major decisions. The CFO is the executive most directly accountable for whether the firm’s financial strategy creates or destroys shareholder value over time.

Stakeholder relationships. The audit committee, external auditors, banks and lenders, institutional investors or PE sponsors where applicable, regulators where applicable. The CFO is typically the firm’s principal point of contact with each of these constituencies on financial matters, and the relationships need to be managed actively rather than reactively.

Executive contribution. CFOs sit on the executive committee and the board and contribute to decisions that go beyond the immediate finance remit — strategy, M&A, executive team composition, organisational design, talent and culture. Strong CFOs are the CEO’s most trusted strategic partner; weaker CFOs are confined to their functional silo.

The role’s proportions vary substantially by firm. CFOs at PE-backed firms typically spend more time on capital structure, transaction work and investor reporting than CFOs at owner-managed businesses. CFOs at growth-stage firms typically spend more time on financial modelling and capital raising than CFOs at mature firms. CFOs at regulated firms typically spend more time on regulatory and audit committee work than CFOs at non-regulated firms.

The CFO candidate pool

The UK CFO candidate market is broader than for many other senior management functions, and several pools recur across the searches FD Capital and Exec Capital run together.

Sitting CFOs at peer firms. The most common pool — candidates currently holding CFO at another firm of similar size, complexity and ownership structure. They have demonstrated they can do the job. The challenge is that the most credible candidates in this pool are typically not actively seeking moves, and the engagement is typically through introduction rather than open application.

Below-CFO finance leaders at larger firms. The natural step-up pool. A divisional CFO at a larger group, a deputy CFO at an Enhanced firm, a head of FP&A or a financial controller with broader scope at a substantially bigger business — all candidates whose roles do not currently include the CFO seat but whose seniority justifies it at a smaller firm. Strong searches in this pool work hard on reference depth.

Big Four audit transitions. Senior audit partners or directors transitioning into in-house roles. The pool is genuine and brings strong technical foundations, but requires that the candidate has made the substantive transition from external audit to operating finance — not just changed firms while retaining an audit-shaped mindset.

PE portfolio CFOs. A specific and substantial pool — candidates who have run finance functions through PE ownership cycles, including transaction support, investor reporting, refinancing, exit preparation. These candidates carry distinctive credentials for PE-backed and growth-stage businesses, and the pool is genuinely tight.

Industry CFOs from regulated sectors. Where the firm operates in a regulated sector — financial services, healthcare, energy, utilities — candidates who have run finance functions in similar regulatory contexts bring relevant breadth. For FCA-regulated firms specifically, prior SMF2 (Chief Finance Function) approval is the strongest credential, and FD Capital’s FCA-Regulated Firms practice is the specialist destination.

The CFO search process

A well-run CFO search has six phases that each need to be done deliberately. The total timeline runs to fourteen to twenty weeks for non-regulated CFO appointments, longer where the candidate carries an SMF2 designation requiring FCA approval (eight to twelve additional weeks for clean approvals).

The brief. Two weeks. The board, the CEO, the chair and the search firm align on the role specification, the candidate pool framing, the compensation envelope and the timeline. CFO specifications that drift through the search — adding criteria, removing criteria, changing emphasis — are a signal that the brief work was not done at the start, and the strongest candidates withdraw.

Market mapping and candidate identification. Three to five weeks. Structured market mapping across the relevant pools, named candidate identification, and discreet engagement. The shape of the candidate pool emerges in this phase — which pools are richest, where the gaps are, who is genuinely open to a conversation.

Shortlist development. Two to three weeks. Strongest candidates from market mapping engaged formally and proceed through structured assessment. CFO shortlists typically run to four to six candidates.

Board interviews and assessment. Two to three weeks. The shortlist meets the CEO, the chair, the audit committee chair (where applicable), and major shareholders or PE sponsors. CFO assessment combines technical depth (financial reporting, audit, capital structure, M&A) with strategic capability (the executive contribution dimension) and stakeholder management (the audit committee and investor dimensions).

Selection and offer. Two to three weeks. Preferred candidate offered the role, offer negotiated, candidate accepts. CFO compensation negotiations often run faster than CEO negotiations because the structure is more standardised across the market — but the equity component in PE-backed structures can require detailed work.

Onboarding and handover. Three to twelve weeks (longer where the candidate has a long notice period). The new CFO works through their existing notice while the firm prepares the audit committee introduction, the relationship with the external auditor, and the first hundred days plan.

For FCA-regulated firms requiring SMF2 approval, the FCA approval window — typically four to twelve weeks for clean applications — runs in parallel with or after the offer acceptance, extending the total timeline. FD Capital’s SMCR compliance recruitment practice handles the regulatory dimension of these appointments directly.

CFO compensation

UK CFO compensation has the same four components as for any C-suite executive — base salary, annual bonus, long-term incentives, benefits — with the proportions and absolute levels varying by firm size and ownership structure.

SME and mid-market CFOs (firms in the £15-50m revenue range) typically see base salaries from £120,000 to £200,000, annual bonus opportunity of 20-40% of base, and long-term incentive structures that vary by ownership: founders and majority shareholders may not offer LTIs at all, PE-backed firms typically offer sweet equity participation.

Larger private and PE-backed CFOs (firms in the £50-300m revenue range) typically see base salaries from £200,000 to £400,000, annual bonus opportunity of 30-60% of base, and LTI structures dominated by sweet equity in PE-backed firms or significant equity grants in larger private firms.

Listed and FTSE 250 CFOs see substantially higher compensation, structured around FCA-disclosed remuneration and shareholder approval. Base salaries run from £400,000 upward, with LTI structures designed for multi-year value creation aligned to shareholder outcomes.

For the comprehensive treatment of CFO compensation across the UK market, see FD Capital’s CFO earnings guide and CFO salary guide, which cover the bands by firm type and the structure of total compensation in detail.

Common CFO search pitfalls

Several patterns recur in CFO searches. Each is avoidable with deliberate planning.

Confusing CFO and Finance Director specifications. Boards that draft a CFO specification but are actually looking for a Finance Director (or vice versa) attract a candidate pool that does not match what the firm needs. The fix is to clarify which role is genuinely required before the search opens.

Underspecifying the audit committee relationship. The CFO works closely with the audit committee chair (where the firm has one) on financial reporting, audit, and risk matters. Specifications that do not address this relationship miss a dimension that strong candidates probe carefully.

Treating the equity component as an add-on in PE-backed offers. In PE-backed firms, the sweet equity is often the dominant economic component of the CFO package. Boards that handle the equity discussion late in the offer phase, or treat it as separate from the headline package, often find their preferred candidate withdrawing.

Underestimating the FCA approval timeline for regulated firms. CFO appointments to FCA-regulated firms holding SMF2 require regulatory approval. Boards that have not factored eight to twelve weeks of FCA approval into their timeline often face regulatory gaps or compromises on the strongest candidate.

Pattern-matching to the previous CFO. Looking for a CFO who looks like the predecessor — same background, same career path — is rarely the right answer because the firm’s situation has changed since the previous CFO was appointed. The fix is to specify what the firm needs from the next CFO.

How Exec Capital and FD Capital approach CFO mandates

CFO recruitment is FD Capital’s specialism. The practice is built entirely around senior finance and finance-leadership recruitment, with a network and a depth of expertise that a generalist firm cannot replicate. Adrian Lawrence FCA leads FD Capital’s CFO mandates personally, just as he leads Exec Capital’s mandates personally — both firms are ICAEW-Registered Practices operating under the same group structure.

For boards whose first conversation is with Exec Capital — typically because the CFO appointment is one part of a broader senior management search across the C-suite — we make the introduction to FD Capital directly. The cross-portfolio relationship is not a referral handover; it is a unified engagement where the broader executive search and the specialist CFO search run alongside each other. For boards whose CFO requirement is straightforwardly a finance leadership search, FD Capital is the natural starting point and Exec Capital is not in the picture.

For FCA-regulated firms requiring SMF2 (Chief Finance Function) approval, FD Capital’s SMCR-compliant recruitment practice handles the regulatory dimension directly, with the FCA approval pathway built into the search from the brief. For boards working through CFO succession alongside SMF1 CEO appointments, Exec Capital and FD Capital coordinate the searches together.

Further reading

For the comprehensive depth on CFO hiring, see FD Capital — the specialist firm. The Finance Leadership Recruitment hub sets out the full practice; the CFO vs Finance Director distinction covers the boundary; the CFO earnings guide and CFO salary guide cover compensation in detail.

For our CFO recruitment service through Exec Capital — typically engaged as part of broader executive team work — see our CFO recruitment service page. For CFO appointments in FCA-regulated firms specifically, see FD Capital’s FCA-Regulated Firms recruitment hub and our FCA-regulated firm executive recruitment hub.

For related C-suite hiring questions, see our How to Hire a CEO guide, our How to Hire a CTO guide, and our How to Hire a CMO guide.

For corporate governance frameworks relevant to the CFO-board relationship, see the UK Corporate Governance Code and ICAEW guidance on financial reporting and audit committee work.