CFO Functional Competencies and Knowledge, Skills & Abilities ('KSAs')

This article compares the financial management needs of growth-oriented entrepreneurial ventures with the competencies available in a certain category of professionally qualified persons (CPAs) in Canada who could potentially be qualified financial managers ('QFMs') in growth-oriented entrepreneurial ventures ('GOEVs').

My interviews of Canadian VCs revealed that their investees needs for a range of financial management services is a function of organizational complexity which increase as the enterprise evolves through stages-of-development in the venture life cycle. Interestingly, there is a range of levels of competency in financial management that can cater to GOEVs evolving needs. Increasing breadth & (sometimes) depth of competencies are associated with progressions in the rank/title of various financial management positions such as chief accountant, Controller, Director of Finance, VP Finance, and CFO. My research indicates that VCs typically recommend investees hire financial managers based on enterprise needs and that tends to lead to a series of hirings & terminations (frequently rationalized as "unsuccessful hires"), primarily driven by cost considerations. In my opinion, such decisions should be value-driven rather than cost-driven and I do not believe most VCs have a full appreciation for the value available from financial managers with the highest levels of competence, let alone the savings in cost & enterprise development time from an earlier, more competent hire.

I reviewed what scholarly literature was available on this issue and it was scant - just a single article. The authors identified four financial management activity domains relevant to new firms – strategic financial management, external financing, financing through operations, and financial controlling, each of which requires respective specific competencies. Further, they determined that the level of competence typically available to small firms was, at best, limited. My article identifies several criticisms of this assessment and perhaps the most significant, in my opinion, is that none of the authors’ background/education indicates any professional accounting or finance qualifications. Therefore, it appears that their study did not have the ‘benefit’ of the 'Financial Management Lens Perspective' (see article #5R9.2023). Accordingly, I will create an update of this article which enhances GOEVs financial management needs using both that perspective and my article on relevant metrics for the enterprise performance of GOEVs (#1V4.2022).

This article also provides a summary of the enabling and technical competencies of a certain category of professionally qualified persons (CPAs) in Canada who could potentially be QFMs in growth-oriented entrepreneurial enterprises. Obviously, members of the CPA profession have differences in length and contextual-relevance of experience. So, the competencies enumerated in this article represent the minimum competencies. As the CPA professions requires members to engage in continuous professional development, some opt to engage in in-depth CFO training which markedly elevates their competencies. I am not aware that such CFO training focuses on the GOEV context specifically. So, I am exploring that possibility with the Chartered Professional Accountants of Ontario. Several other articles on this website and my PhD dissertation refer to these CPA competencies in identifying ways that CPA-qualified financial managers can add value to GOEVs and their VCs (see also article #4C6.2023).