Recently, I had the privilege of meeting with a group of financial professionals to discuss CFO/Controller succession planning. The subject was topical given findings from a 2013 study authored by the Financial Executives International Canada, the Canadian Financial Executives Research Foundation and Robert Half that cited only about one-third of SME private businesses had developed a plan. Numerous reasons were reported, including lack of direction from owners, a focus on other business priorities, internal conflicts and a general lack of strategic planning.
The planned or unplanned departure of your CFO or Controller can be disruptive to a business. To support continuity of operations, the individual’s extensive responsibilities, company knowledge and insights should be harnessed in some form of a basic ‘succession readiness ‘plan that can be executed with your financial professional. Consider the following actions:
- Documentation of roles and responsibilities for the CFO/Controller – both existing and required enhancements to support future company objectives
- Define your culture – the personality fit and compatibility should be a higher priority than technical skills that can be learned or supported
- Commit to developing a plan fully supported by the business owner – this includes defining objectives of the plan, resources required (including the incumbent ), nature of deliverables and timing
- Identify whether internal sourcing and/or external sourcing of possible candidates will apply to the business – being fully cognizant of future company plans, growth, and direction
- Internal candidates – identify high potential candidates, invoke training & leadership development, provide rounded practical experience and nurture development in accordance to the company strategic plan
- External candidates – conduct networking with industry executives, business colleagues, professional advisors, and professional recruitment agencies; become knowledgeable of extensive internet-based recruitment tools (i.e. LinkedIn, career posting sites, etc.)
In short, it’s easier to develop a CFO/Controller succession readiness plan now before it is required: whether predicted or unscheduled. The plan should document responsible persons, roles and responsibilities, culture fit criteria, identification of internal candidates (if applicable) and development path, external resourcing strategy (if applicable) and interim assistance arrangements.
Good planning will ease future leadership transitions and that’s just good business sense.