2025
CFO
ESSENTIALS
Beyond Finance: The CFO as the CEO's Right Hand
Executive Search & Interim Management brileyfarber.com
INTRODUCTION
Welcome to the second edition of B. Riley Farber’s CFO Essentials,
Beyond Finance: The CFO as the CEO's Right Hand.
Designed for mid-market private companies, this resource was created to
help your organization better understand and navigate the attraction, hiring
and retention of a seasoned and transformative finance leader.
In 2024, we highlighted the evolution of the CFO role and what organizations
needed to do to secure exceptional talent, who will not only manage financial
complexities, but also spearhead change, drive innovation, and guide your
business towards sustainable success.
In this year’s report, we:
Explore our exclusive CEO survey results which reveal the key skills and
attributes CEOs are looking for in their CFO.
Take an in-depth look at how your ownership structure and your ultimate
business objectives will determine what you need from your CFO.
Share how Interim and fractional CFOs can act as a bridge strategy to
help you solve unique and challenging situations.
Provide insights on long-term incentive plans to help keep your CFO
motivated and focused on longer-term objectives.
We hope this resource will support your planning for fiscal 2025 and beyond.
To learn more, please reach out for a conversation to any of our team
members featured in the guide.
Ian Brenner Charlene Bergman
Senior Managing Director Managing Director & Partner
TABLE OF
01
SURVEY SUMMARY (4-5)
CONTENTS The Critical Role CFOs
Play in the Success of
Mid-Market CEOs
02
INSIGHTS (6)
7 Trends for 2025
03
INSIGHTS (7-9)
The Right CFO: Aligning
Skills to Your
Ownership Structure
04
INSIGHTS (10-12)
How Interim and
Fractional CFOs Can
Transform Your Business
05
INSIGHTS (13-15)
The Importance of a
Long-term Incentive
Plan for Your CFO
06
ABOUT US (16)
Who We Are
3
SURVEY SUMMARY
The Critical Role CFOs
Play in the Success of
Mid-Market CEOs
WHY WE CONDUCTED
THE SURVEY
As we closed off 2024, we reached out to the leaders of and investors in mid-market
businesses, across Canada, to understand what CEOs value most from their finance leaders
It was a busy year for CFO hirings and all indications point to a continued need for exceptional
finance leadership. With that in mind, we wanted to understand the CEO’s perspective and
priorities when sourcing and selecting a CFO.
Our survey validated the evolution of the CFO role and highlighted the importance of having a
business partner in the C-Suite.
KEY FINDINGS:
THE ROLE OF THE CFO IS CRUCIAL
of CEOs said the CFO role indicated they could not
is extremely important to manage without a CFO—
75% their organization,
highlighting its critical place
90% while some could in the
short term, nearly half said
in the leadership team they couldn’t manage at all
without this role
INTEGRITY OVERSHADOWS ALL
CEOs emphasized that they value the more human skills—such as leadership,
integrity, and strong communication and interpersonal skills—above technical
expertise.
Integrity stood out as the most important quality, reflecting the CFO’s role as a
trusted and confidential advisor to CEOs, with 44.7% of respondents having this
quality at the top of their list.
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Technical expertise is a baseline expectation, however problem-solving, analytical skills,
and business acumen are equally valued. This indicates that CEOs expect CFOs on their
team to contribute beyond the finance function.
CFOS AS STRATEGIC PARTNERS
of CEOs described their CFO as The survey also revealed that CFOs
their right hand, underscoring are seen as contenders for the CEO
82% the CFO’s strategic and role, reflecting their growing
operational importance influence and leadership capacity
The findings clearly demonstrate the
evolving and essential role CFOs play as
business partners to CEOs, extending their
purview well beyond the finance function.
This insight will drive a deeper dive into
these findings in our 2025 CFO Essentials,
which focuses on the CFO’s increasingly
strategic role in organizational leadership.
5
7 TRENDS FOR 2025
As we look towards 2025, we have observed various trends for CFO’s
working closely with the CEO to drive organizational success.
Important considerations for CEOs hiring into this critical executive
partnership role include:
Strategic Focus: Companies are prioritizing CFO hires who can
drive business strategy and solve complex operational
challenges. The emphasis is shifting from maintenance roles to
strategic positions that can significantly impact the organization's
growth and performance.
Talent Acquisition: CFOs are becoming more involved in talent
management, partnering with HR to align financial and workforce
strategies. They're reframing talent expenses as investments and
leveraging data-driven insights to tie workforce strategies to
business outcomes.
Operational Orientation: Modern CFOs are expected to have a
deep understanding of business operations, focusing on solving
critical business problems rather than solely managing financial
records.
Stakeholder Management: Effective communication skills and the
capability to build sound and trusting relationships with various
stakeholders, including banks, investors, and board members, has
become paramount. CFOs are now responsible for providing
clear, transparent, and consistent updates on financial
performance and business strategy.
Leadership and Soft Skills: Leadership, the ability to influence,
decisiveness, and other EQ-related soft skills have grown
significantly in importance for the CFO role. These skills are
crucial for managing cross-functional teams and driving
organizational change.
M&A Expertise: With continued private equity activity, and an
expected pickup in mergers & acquisitions activity, CFOs are
increasingly hired for their expertise in deal-management,
integrations and consolidations.
Technology Utilization: CFOs are at the forefront of leveraging
new technologies, including Business Intelligence (BI), Artificial
Intelligence (AI), data analytics, and cybersecurity solutions.
They're driving digital transformation initiatives to enhance
financial operations and decision-making processes. 6
INSIGHTS
The Right CFO:
Aligning Skills to
Your Ownership
Structure
Once seen as a tactical leader focused only on financial reporting, compliance, and
cost management—the role of the modern CFO has evolved dramatically over the
decades. In-demand CFOs are now uniquely positioned as strategic business
partners and co-pilots to CEOs. This includes providing strategic recommendations
and supporting vital initiatives well beyond the finance function.
Last year, we took a deep dive into this evolution in our 2024 CFO Essentials survey.
This year, we are taking it a step further.
The number one question we get from new clients looking to fill or replace their CFO
is, “what is the right type of CFO for my business?”
Our answer is always the same, “It depends on a number of factors – circumstances
alter cases.”
One of the important factors is your ownership structure; a clear understanding of the unique
dynamics and business needs is essential, as these factors shape the qualities and capabilities
your CFO should bring to add maximum value and meet the needs of your situation.
Many of the skills and competencies required are universal and transferable across all
ownership structures. Strong financial stewardship and maximizing profits is common to all
organizations. Responsibilities such as cash flow management, treasury and banking
relationships, team leadership and development, financial planning & analysis, oversight of
financial reporting, audit, tax and systems implementations or upgrades are also table stakes.
Beyond this, the nature of the ownership model and governance framework will dictate
specific experience, competencies and skills needed by your organization and the CEO.
7
For example, a CFO in a private equity-owned portfolio company may focus heavily on value
creation, driving growth, expeditious turnaround or preparing for exit strategies, while a CFO in
a publicly traded organization prioritizes regulatory compliance, investor relations, and
quarterly reporting. Similarly, family-owned businesses require a CFO skilled in navigating
interpersonal dynamics and aligning financial strategies with long-term wealth-creation and
legacy goals.
These nuanced demands highlight the need for CFOs with differing capabilities and
experiences to meet the specific expectations and strategic objectives of your ownership
framework, as outlined in the chart below.
Public Private/Owner Venture Private Family
Company Operator Capital Equity Office
Financial Cash flow and Capital & debt Transactions Trust and
Reporting working capital raising, liquidity including M&A, fund structure
(IFRS, US management management integrations, planning
Technical GAAP, ASPE) divestitures,
Cross functional Investment exits Treasury,
MD&A operational analysis, FP&A,
Commentary effectiveness valuations, Reporting into banking
presentations lenders, relationships
Investor ERP/digitization operating under
Relations Broader a corporate Tax and
leadership structure with Estate
functions (e.g HR, leverage planning
IT, Legal, etc.)
Capital & debt Organic and Investor and Company Long term
markets M&A growth board valuation strategic
collaboration planning
Strategic
Risk Banking and Focus on
Management covenant Competitor scaling the Focus on wealth
and ESG relationships analysis infrastructure value for the
compliance and growth family through
Tax strategies, Roadmap to strategies investments and
Tax legal/contracts product or service sustainable
optimization support commercialization growth
Unique Externally facing Extremely Extremely fast Focusing on The family office
role requiring operationally paced driving value CFO understands
to the quarterly filings, focused, environment for the PE, a that their role as
structure audit moving the with a smaller constant financial and
requirements business team, the CFO focus on strategic
and shareholder forward while must be nimble, eventual exit, confidant to the
and debt- preserving agile and and being a CEO/family is of
provider cash and juggling bridge paramount
relations reducing/defer competing between importance in
ring tax priorities to being the growing their
expenses ensure the CEO’s right wealth. The CFO
company hand and must operate
continues to collaborating with the utmost
grow and scale with the PE discretion
investors
8
One Size Does Not Fit All
In conclusion, the skill sets required to work effectively within different ownership structures of
an organization make it essential for you to identify your organizational needs. You should
evaluate whether the current or prospective CFO possesses the leadership, aptitude and skills
to meet those needs. This assessment ensures your organization is equipped to navigate its
unique challenges and capitalize on opportunities.
Selecting, upgrading, or assessing your CFO, or Head of Finance, requires more than
addressing the immediately perceived shorter to medium–term needs. You should take a
holistic approach by considering market conditions, the stage of a company’s lifecycle, growth
aspirations, culture, regulatory governance, and how the ownership structure influences
strategy and operations. This comprehensive perspective is key to ensuring that your CFO is
positioned to effectively support you and contribute to your company’s overall success in the
long-term.
9
INSIGHTS
When Temporary
Is Strategic:
How Interim and
Fractional CFOs
Can Transform
Your Business
As the survey highlighted, CEOs consider their CFO (or lead finance role) to be
critical to the success of the organization.
of responding CEOs indicated that “the CFO is extremely
75% important in the organization”, with the balance saying, “very
important.”
Furthermore, of particular significance is that 90% of the CEO’s surveyed indicated
that when there is a vacancy in this role, they could only get by with the seat empty
“for a short while” or “not at all.”
Given the importance of the CFO role, we suggest some strategies to consider, in
certain situations, to address filling this important role in the short term, should the
need arise.
As a CEO, board member or investor, what can you do if you
find yourself in one of the following situations?
you have had a strong financial leader, but that person has left unexpectedly
you lead a growing company, and have never had a strong, strategic finance leader
you are contemplating a one-time event, such as an M&A transaction, a capital raise, or a
new system implementation
you run a smaller organization that needs, but cannot afford, a full-time CFO
your business is going through challenging times, and you need to execute a turnaround
In each of these scenarios, accessing the options of a seasoned interim or fractional CFO may
be the solution.
10
The Interim Imperative
An interim CFO is an experienced finance professional acting in a full-time capacity, but for a
limited or defined period. It is usually seen as a plug-the-gap strategy, perhaps to backfill a
vacancy. However, hiring an interim CFO is also an effective and impactful approach to deal
with other complex business situations, such as an acquisition evaluation, negotiation, or
integration; an ERP implementation; or taking on a strategic project without the need to make
a long-term commitment to a permanent finance executive.
A few examples of recent interim engagements where we stepped in to assist by providing an
effective solution include:
The placement of an interim CFO into a Private Equity (PE) firm to perform due diligence
on a potential acquisition in the aerospace sector. The CFO had worked in that
manufacturing sub-sector, leading to an effective, value-added process, given their deep
industry expertise. Ultimately the PE firm avoided a potentially damaging acquisition, due
to risks uncovered and quantified by the interim CFO.
We recently placed an interim CFO into a PE portfolio company, in parallel with the
execution of a permanent search. While several strong candidates were identified, the
client ultimately chose to offer the full-time role to the interim candidate, whom they had
seen in action for several months. The dual strategy (interim during a permanent search)
gave them the confidence that they had properly scanned the market, filled a critical
leadership gap and found the right person.
A large not-for-profit recently lost their CFO prior to budgeting and reporting season. We
were able to quickly present a seasoned leader with related sector experience and
personal interest in their cause, who got them through the reporting requirements and
helped interview, select, and on-board the next full-time CFO. In this case, the individual
placed was a career interim executive who parachutes into challenging situations and
solves complex financial and business problems.
The common theme to these examples is a fit for purpose approach to getting the skills and
resources needed, and responsively delivering skilled resources within a tight time frame.
The Faithful Fractional
A fractional CFO can be a great talent-sourcing strategy for a
growing business. In the earlier stages of their lifecycle, companies
will often have a controller/bookkeeper, or similar function,
providing basic accounting needs. However, little financial insight
and business advisory support is available to you.
In these instances, a fractional CFO can be hired, often with a 2-3
day per week workload, which flexes as required. The persona of
the fractional CFO is that of a seasoned professional who brings
wisdom, maturity and deep experience, without requiring a ramp
up time as he or she onboards with the company and is self-driven
and self-reliant.
11
The following are examples of recent engagements
where a Fractional CFO was deployed to support the
CEO:
A fractional CFO was hired into a small consumer
lending provider, focused on a very specific
subsector. The CFO was instrumental in obtaining
additional capital funding, allowing the business to
grow faster than expected and with a well-funded
model.
A successful manufacturer of medical devices had
recently added a new and high growth software
segment to their business and was looking to divest
their original core business. They hired a fractional
CFO with deep experience in M&A transactions and
divestitures to support this initiative. The fractional
CFO led the entire sales process, followed by the
operational carve-out of the business. This work
would have cost the company 2-3x more were it
done by an outsourced accounting or advisory firm.
The interim or fractional CFO solution addresses a wide
variety of business needs in an effective, efficient, and
economical way. The typical candidate for an interim or
fractional role will be a later-career, experienced CFO
who has worked in a variety of industries, different
ownership structures, varied life-cycle stages and sizes
of companies. They are driven by doing great work with
good people and contributing value. While they want,
and deserve, to be compensated fairly for their time and
contribution, they are typically not focused on titles,
status, perks, or building their career; rather on making
an impact in a supportive manner to you and your
leadership team.
The interim CFO is often referred to as a SWAT team of
one, parachuting in with their business acumen,
maturity, and multiple strategic and technical skills, to
solve a challenging situation. You will benefit from this
finance leader who is credible, a subject matter expert,
communicates effectively and is focused on delivering
results.
We encourage you to proactively consider how and
when an interim or fractional CFO can help you
accelerate your business results.
12
INSIGHTS
The Importance of a
Long-Term Incentive
Plan for Your CFO
In today’s rapidly evolving business environment, the CFO has become an
indispensable ally to the CEO, with 82% of CEOs acknowledging their CFO as their
right-hand partner.
The survey we conducted also highlights the dependence on the CFO and the
critical importance of retention, revealing that
of CEOs believe while another 44% feel
they would face they could only
45% significant 44% manage in the short
challenges term without their
without their CFO financial leader
Given this dependency, LTIPs (long-term incentive plans) play a vital role in
attracting, retaining, and onboarding a loyal CFO. By aligning their interests with
your company's long-term objectives, LTIPs not only foster a strong partnership
between you and the CFO, but also enhance the CFO's commitment to driving
sustainable growth and strategic success. In this article, we explore the importance
of LTIPs in strengthening this pivotal relationship.
LTIPs play a crucial role in the strategic framework of modern businesses, providing a clear
pathway to align the goals of the organization with the financial and professional aspirations of
its executives and key talent.
Organizations face new challenges regarding how they attract and retain exceptional CFOs. To
thrive in this landscape; adopting, incorporating and updating an LTIP program is imperative
for nurturing a motivated, loyal, and high-performing finance executive who is incentivized by
long-term value creation and sustainable growth.
13
What is an LTIP?
An LTIP is a longer-term compensation mechanism through which companies can incentivize
and retain employees. It is a method commonly used to reward employees for achieving
specific goals, over a defined time, which leads to increased shareholder value. It is typically
offered to C-suite executives who directly impact the long-term strategy and performance of
the business.
In the past few years, there has been an increased expectation by CFOs for the inclusion of
LTIPs or equity programs as one of the fundamental elements of their compensation, as they
contemplate their next career move. So, why should you consider providing an LTIP to your
CFO (particularly in a private company)? The most important reasons include:
As a deferred compensation strategy, LTIPs are a win-win for both the company and the
CFO
For employers, they offer a valuable opportunity to reward the successful execution of
long-term strategies, fostering commitment to sustained corporate performance
For employees, they serve as recognition for exceptional contributions and a means of
building personal wealth
For shareholders, they align employees with company performance and long-term
vision—keeping them in the seat and highly motivated
To attract the best-in-class talent, there needs to be a compelling reason to consider an
opportunity in a high-demand market
To remove short-term focus on profits and bonuses
To showcase your commitment by recognizing their role in driving sustainable growth
To establish accountability for executing agreed strategies
Building loyalty, trust, and creating a partnership mentality
Types of LTIPs
Employee Share Option Plans (ESOPs) - An ESOP is a powerful employee benefit plan that
gives them ownership in their company, aligning their interests with the company's long-term
success. ESOPs, common in startups to attract and retain talent, are also used by larger
companies to incentivize employees, while preserving short-term cash flow from being paid
out as bonuses.
Phantom Share Plans (PSPs) – these are a type of incentive compensation that grants
employees the benefits of stock ownership, without giving them real shares of the company.
PSPs tie employee rewards to company share performance (or shareholder value) through
cash payouts, avoiding equity dilution and making them attractive to existing
shareholders.
Since no shares are transferred, phantom schemes bypass share transaction regulations,
offering companies flexible contractual incentives.
14
Transaction bonus - a transaction bonus is a powerful tool for rewarding employees involved
in major corporate transactions, motivating them to work toward the best possible outcome
while helping to retain critical staff during a transitional period.
An incentive compensation given to employees or executives upon completing major
transactions such as mergers, acquisitions, or company sales
It rewards employees for executing transactions smoothly and helps retain key staff
during the transition
Deferred Bonuses - a type of incentive compensation where the payout is delayed until a
future date, rather than being awarded immediately after performance targets are met. These
bonuses are typically used to reward long-term performance and encourage employee
retention by spreading the reward over a period of time, often contingent on continued
employment or the achievement of long-term company goals.
Deferred bonuses resemble standard bonuses but delay payment, are easy to implement,
and avoid regulatory issues, making them more common than ESOPs and PSPs
Like other LTIPs, deferred bonuses promote retention by requiring continued employment
and delay the cash impact of payouts
In summary, a well-structured long-term incentive plan rewards partnership, contribution, and
longer-term value creation. To secure and retain an exceptional CFO in a highly competitive
market, you should consider structuring an attractive LTIP and incentive program; this
demonstrates the importance of the role and the acknowledgement of shared success.
NOTE: Given the technical nature of LTIPs, if you are considering implementing or changing
your LTIP, we recommend that you engage an appropriate professional to provide legal and
taxation advice.
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ABOUT US
WHO WE ARE
For over 40 years, B. Riley Farber has IAN BRENNER
successfully partnered and worked with Senior Managing Director
the leadership of primarily mid-market
[email protected]
organizations, their boards of directors,
lenders and other professionals. With M: 647.408.6309
our reach across North America and
internationally, and working with a
highly collaborative approach, our
diverse team of business-savvy
professionals operate seamlessly to CHARLENE BERGMAN
provide services ranging across the Managing Director & Partner
areas of human capital, financial
advisory, wealth management and [email protected]
restructuring. M: 647.206.1854
In 2023, the corporate division of
Farber Group was acquired by B. Riley
Financial Inc (NASDAQ: RILY) a diverse
platform that provides tailored financial STEVE ROSEN
solutions to meet the strategic,
Partner
operational, financial advisory and
capital needs of its clients through a
[email protected]diverse range of collaborative and M: 905.717.3183
complementary business capabilities.
(www.brileyfin.com)
Get in touch for more info. DARREN BERGER
Partner
[email protected] M: 647.404.1799
ANDREW TODD
Director
[email protected]
M: 647.975.7253
16
Authentically
Different.
brileyfarber.com
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