Last week, I wrote about how you know it is time to replace your CFO.
So how exactly does a company hire their next CFO when their current CFO is still in his or her chair?
There are 2 choices.
1) Let the CFO go.
2) Look (confidentially) to replace the Chief Financial Officer while they are still employed.
Let the CFO go
I recommend letting the CFO go before replacing them, if:
1) The CEO and the Board has lost confidence in the abilities of the CFO, and
2) There is a senior finance executive (or sometimes, an experienced Board member) in the company that can take the reins on an interim basis.
Be aware that when performing your new search for your Chief Financial Officer, prospective CFO candidates will want to know what happened. I would recommend disclosing as much as you can, because CFOs can smell fertilizer from far away.
Perform a confidential CFO Search
A confidential search for a CFO is difficult because most CFOs pretty much know all the important details of what is going on in the company.
You can choose to do a Search for your Chief Financial Officer without a using an executive search firm. It is not a good choice, but it is still your choice.
I highly recommend using an executive search firm. (I always recommend working with a search firm when hiring a CFO, and even more so in this sensitive situation.) A reputable search firm understands the complexities of working on a confidential search, and knows how to attract candidates to you without word getting out on the street, or getting back to your current CFO.
One important issue to address when using a search firm is how you pay your retainer for this search. As the CFO may be one of the people signing cheques in your organization, the last thing you would want is the CFO to see an invoice for a CFO Search.