How is industry experience considered when selecting a new CFO

When should the CEO and board of directors consider looking to an industry outsider to fill its head of finance role? First, the CFO needs to be a key participant with a seat at the table to drive the company’s strategic decisions. This would mean the CFO needs to be a visionary with a strategic outlook alongside the CEO. The CFO also needs to possess high credibility when communicating results and mapping initiatives to the company’s goals. Employees, suppliers, partners, and investors will look to the CFO for this guidance. 


Regardless of industry experience, the CFO’s resume can provide immediate confidence to a company’s stakeholders. For example, consider an industry outsider who was a successful CFO at a Fortune 100 compared to an internal candidate who has deep industry and company experience but would be a first-time CFO if promoted into the role. 


What is prioritized when evaluating a new CFO’s background can also hinge on the company’s key initiatives. For example, are M&A deals expected to be a core growth engine moving forward? If so, selecting a CFO with deep M&A experience could be more attractive than specific industry knowledge. An outsider may also be a plus if the company considers itself a laggard in modern technology. An executive from a technology company or someone who has successfully led technology transformations before could be more impactful as the new CFO. 


On the other hand, if the company is expected to navigate industry-specific hurdles including combating a formidable competitor, managing union relationships, complex government regulations, complex supply chain, and partnerships there could be an advantage in bringing in someone with deep industry experience able to hit the ground running on day one on these areas. 


Another aspect to consider could be the company’s current finance and accounting staff. Are these key managers and division leaders all deep company and industry experts? If yes, this could provide a good ecosystem of support to enable the company to take a chance on an outsider as the new CFO. In addition, this could allow the new CFO to be a change agent as an outsider while relying on their team for expert advice while they get up to speed themselves. 



Yasmine O’Brien discusses the advantages of hiring an industry insider as the new CFO in her CFO.com article.


“Although opinions vary, we’ve seen more success in hiring for senior finance positions when candidates have relevant industry experience. And, it becomes even more crucial for upper-level roles in highly regulated industries such as financial services, pharmaceuticals, oil and gas, and hospital management.”



WSJ’s Nina Trentman and Christopher M. Matthews co-authored an article describing Exxon’s decision to hire an industry outsider as their new CFO


“Exxon Mobil Corp. hired a company outsider to lead its finances, a move that comes as the energy giant faces investor pressure to take more steps to transition away from fossil fuels.”


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