The 6 Types of CFOs and How To Find the Right Fit for Your Business

Private Equity-Backed Company CFO: Navigating Amid Dual Loyalties

CFOs at PE-backed companies operate in a fundamentally different environment from their public company counterparts. While public companies know the exact format and timing of reporting requirements, private equity CFOs work to satisfy both their direct boss—the CEO—and the private equity firm.

These two parties may have different reporting requirements and occasionally give conflicting directions, creating a unique challenge that requires diplomatic skill and strategic judgment.

Unique Operating Environment

PE-backed company CFOs operate in an environment shaped by aggressive growth targets and exit timelines.

The CFO is frequently the first executive a PE firm replaces upon investing in a new company. This practice stems from the firm's desire to install someone more aligned with their value creation agenda and reporting requirements, rather than someone whose primary loyalty lies with the CEO or existing management team.

This dynamic creates an operating environment where the CFO must balance competing interests while maintaining trust across multiple stakeholder groups. It requires political acumen alongside financial expertise.

Essential Skills

Process improvement and change management capabilities are paramount for the PE-backed CFO.

Private equity firms typically want to "professionalize" back-office functions—finance, IT, and HR. This means implementing improved processes, automating workflows, establishing internal controls, and transitioning from reviewed financial statements to fully audited ones.

These professionalization skills directly translate to acquisition integration, a frequent responsibility for PE-backed CFOs. Most will oversee one or more acquisitions per year, requiring them to quickly integrate new entities into existing financial reporting and operational frameworks.

“The CFO must align exit-driven agendas with the management team’s operational realities,” says İbrahim Paksoy, Boyden Managing Partner, Türkiye. “This dual mandate often requires making short-term, efficiency-focused decisions that can create internal strain.”

The most effective CFOs are those who can execute these strategies swiftly while communicating them with clarity and securing ownership across the organization, Paksoy observes.

Strong emotional intelligence is critical, as these CFOs must manage multiple reporting relationships with the CEO, board members, and various contacts within the PE firm.

“By fostering transparency and trust, they gain credibility with all stakeholders, not just the PE sponsors—a rare and highly valuable skillset,” Paksoy says.

Value Creation Focus

The PE-backed company's focus on value creation fundamentally shapes the CFO role.

“These leaders concentrate intensely on growth and transformation within the context of the next exit scenario,” says Kathleen Dunton, Boyden Managing Partner, Germany. “This demands attention to creating and improving financial transparency in a KPI driven environment where cost management, cash flow, treasury, and risk management are at the forefront.”

She also points out: “The ability to define, quantify and maximize value creation is essential. Today, more than ever before, this means pushing automation and digitalization to increase efficiency.”

In recent years, as cycles have grown longer in volatile market and economic environments, Dunton has seen an increased demand for PE-backed CFOs who know how to remain engaged. “It is no longer just about short-term gains,” she says. “The ability to set the strategy and create value in longer growth phases, in addition to managing longer-term financial planning, have become important factors in CFO hiring.”