A ‘first-time CFO guide’ from Heidrick & Struggles outlines 9 things new finance chiefs need to do well

Being a first-time CFO has never been easy exactly—but it has arguably never been harder than now.

“Anecdotally, I would say finance chiefs are under more pressure in their first year due to both the evolution of the role of the CFO and resulting expectations of the role,” says Alyse Bodine, global managing partner of the financial officers practice at the executive search and consulting firm Heidrick & Struggles.

The firm’s financial officers practice team recently released a “First-time CFO guide.” It’s based on conversations with more than 60 sitting and former finance chiefs around the world. The team saw the need for such a guide, says Bodine, a coauthor. Oftentimes they field questions from first-time CFOs regarding what they should anticipate or prepare for, she says.

Here’s a summary of the nine steps first-time CFOs, across regions, should focus on, based on the report:

—Build strong stakeholder relationships with effective communication.

—Work with the board. “You have to add value; they need to see that you bring something to the table,” a former CFO, now CEO, told the firm.

—Build a relationship with the CEO.

—Embrace the business strategy role.

—Execute full-functional leadership: It’s important to have a strategic overview of the entire company, but also keep a hand on the finance function, according to the firm.

—Build high-performance teams.

—Have an influence on technology implementation: “There are many CFOs who [would rather] focus on their area of expertise, but there’s no choice now,” a finance chief told the firm.

—Take responsibility for ESG.

—Create your personal leadership style.

Within the guide, there are three regional focuses: the U.S., Asia-Pacific and the Middle East, and Europe and Africa. A Heidrick & Struggles analysis found that 72% of current Fortune 100 CFOs were appointed to their current roles as first-time CFOs, according to the firm. Taking a look at the guide for CFOs in the U.S., the top three priorities based on CFO interviews are:

—Understanding the business in depth: “You’re not expected to be the expert in all facets of the business, but you should be a partner who’s willing to lean in and learn and knows when to ask for more information,” a CFO told the firm.

—Understanding the impact and potential of technology: “I’ve gone to the extent of finding a consultant who helps me stay up to speed with the evolving needs of companies in this regard so that when I’m working with my chief information officer, I’m not unarmed by my lack of a tech background,” a CFO said.

—Nurturing strong relationships with the CEO, board, and executive team: A few qualities are key to building these relationships, such as clarity, honesty, and transparency, according to the firm.

Bodine says the project was an opportunity to tap into the firm’s network and ask proven CFOs for their thoughts and advice. And the guide is also a way for CFOs to “pay it forward,” she says. 

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Mark C. Mitchell was promoted to SVP and CFO at Frontier Airlines, Inc., a subsidiary of Frontier Group Holdings, Inc. (Nasdaq: ULCC). Mitchell, who previously served as Frontier’s VP, chief accounting officer and VP of finance and investor relations, succeeds James G. Dempsey as CFO. Dempsey was promoted to president.

Andy Keegan was named CFO of Revelyst, a company of Vista Outdoor Inc. (NYSE: VSTO). This is part of Vista's planned separation of its outdoor products segment into a standalone public company. Keegan will continue to serve as VP and interim CFO of Vista Outdoor until the completion of the separation. He joined Vista Outdoor’s predecessor Alliant Techsystems Inc. in 2012 and has more than 15 years of experience in finance, accounting, and treasury. Before his current role, he was the VP of treasury and corporate FP&A, CFO of the Ammunition Business unit, and VP of corporate accounting. 

Big deal

Rite Aid, bridal wear retailer JLM Couture Inc., and DirectBuy Home Improvement Inc. filed for bankruptcy during the month ending Oct. 17, an analysis by S&P Global Market Intelligence finds.

Rite Aid plans to close underperforming stores and has entered into an agreement to sell its pharmacy benefits and services company Elixir Rx Solutions LLC to MedImpact Healthcare Systems Inc., according to the report. Twenty-five retailers sought bankruptcy protection in 2023, as of Oct. 17. This is more than the previous two years' totals. However, only half the bankruptcy filings were seen over the same time frame in 2020, according to S&P Global Market Intelligence.

Going deeper

In a new episode of Wharton's Ripple Effect podcast, "What Are the Signs of a Recession?" Wharton finance professor Nikolai Roussanov weighs in on the possibility of a U.S. recession.

Overheard

"The addition of Hess is expected to extend further Chevron’s free cash flow growth. With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases."

—Chevron Corporation's CFO Pierre Breber said in a statement regarding this morning's announcement that Chevron has entered into a definitive agreement with Hess Corporation to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion.