Questions to Ask a CFO of a Large Company
For people who get a short window with the finance chief of a large or listed organisation. Twenty questions on capital allocation and hurdle rates, which segments earn their cost of capital, what investors press on, cost growth, group and divisional tension, closing at scale, disclosure workload, and succession.
The questions
Open any question for the note
How do you choose between reinvesting, paying dividends and buying back shares?
Why ask it
This is the decision a large-company finance chief owns more than any other, and the ranking is rarely arbitrary. Listen for whether the answer starts from returns or from what shareholders have come to expect, because those lead to different companies.
What hurdle rate do you use for new investment, and when did you last revisit it?
Why ask it
A hurdle rate that has not moved in years, through changing interest rates, means the number is a convention rather than a tool. Ask whether it varies by division, since a single group rate quietly starves the lower-risk businesses.
Which parts of the group earn above their cost of capital, and which don't?
Why ask it
Almost every large company has a division that has not covered its capital charge for years and survives on history. Whether they will name it, even in general terms, tells you how honest the internal conversation is.
What do investors press you on most, and what do they largely ignore?
Why ask it
The ignored part is usually where the interesting risk or value sits, since attention concentrates on one or two headline metrics. It also tells you what the internal reporting has been shaped to answer.
Where is the biggest gap between how the market values this company and how you see it?
Why ask it
Answerable without disclosing anything new, because it is about narrative rather than numbers. A finance chief with no view here is unusual, and one who blames the market entirely rather than the company's own explanation is telling you something.
Which costs are growing faster than revenue, and what are you doing about them?
Why ask it
At scale the answer is often technology, compliance or people in a specific geography. Vague talk about efficiency programmes without a named cost line usually means the growth has not been decomposed.
In the last set of results, how much of the improvement was price, how much volume, and how much currency?
Why ask it
A precise question that shows you read the numbers, and the split matters because price and currency do not repeat like volume does. Anyone in the role can answer it immediately, which makes hesitation informative.
How do you stop divisions optimising in ways that hurt the group?
Why ask it
Transfer pricing, shared customers and internal cost allocation create fights that consume enormous management time. Look for a mechanism, since goodwill between division heads is not one.
How is the finance function organised, and how much sits in shared service centres?
Why ask it
Where the transaction processing lives shapes cost, control and career paths for thousands of people. Ask what has been brought back in-house, because reversals are where the real lessons are.
How long does the close and reporting cycle take at your scale, and what is the constraint?
Why ask it
The constraint in a large group is usually consolidation across ledgers and jurisdictions rather than bookkeeping speed. A very fast close is a genuine indicator of system and data discipline, which is hard to fake.
What is the growing disclosure burden costing you, in people and in attention?
Why ask it
Sustainability and tax transparency reporting have added real workload for large groups over recent years. The answer shows whether it is being treated as compliance to be survived or as data the business will actually use.
What is the largest change programme running inside finance, and what part of it is behind?
Why ask it
System replacements at this scale run for years and rarely to plan, so an account with no delays in it is a presentation rather than an answer. Ask what they would sequence differently.
How do you decide to stop funding a business rather than keep fixing it?
Why ask it
Exit discipline is the hardest thing for a large company to maintain, because someone senior always owns the division. A specific example of a disposal or closure, and how long it took to get agreement, is the useful part.
Which risk do you think is underpriced inside the company?
Why ask it
Invites a judgement rather than a disclosure, and the answers tend to be concentration risks: one supplier, one region, one platform, one very large customer. A recital of the risk register means you are getting the published version.
How do you make sure bad news reaches you from a division on the other side of the world?
Why ask it
Distance and layers are how large-company surprises happen, and every experienced finance chief has a story about it. Look for a named mechanism: rotating controllers, internal audit, a direct line for finance staff outside their local chain.
What is on your own desk each week, and what has moved off it in the last three years?
Why ask it
What they have successfully delegated shows both the strength of their team and where they have chosen to keep control. If nothing has moved off, either the team is thin or the delegation is not real.
How do you develop the people who could do this job next?
Why ask it
Large-group succession takes years of deliberate placements, usually including a divisional finance role and something operational. An answer that names roles rather than programmes is the credible one.
What do analysts most often get wrong about the business?
Why ask it
Comfortable for them to answer and genuinely instructive, because the misunderstanding is often about how revenue is earned or when cash arrives. It also shows which part of the story the company has failed to tell clearly.
What would you change about how targets are set here?
Why ask it
Target setting at scale drives behaviour more than strategy does, and most finance chiefs have a private view on it. Watch for whether they mention the link to incentives, which is where the distortions usually start.
What would you tell someone who wants to be doing your job in fifteen years?
Why ask it
A closing question that gets specifics rather than encouragement: an overseas posting, a period in operations, a treasury rotation, the first time they had to talk to a regulator. Ask what they would skip if they could.
Using a short window well
Practical guidance for the conversation itself
Do the reading that is already public
For a listed company the annual report, the last two results presentations and the transcript of the most recent analyst call cover most of what a general question would have got you. Segment disclosures in particular will already tell you margins by division, so use your time on judgement and mechanism rather than on facts you could have looked up. Arriving with one figure from the accounts, quoted accurately, changes how the rest of the conversation goes.
Lines they cannot cross
- Anything unpublished and price-sensitive is off limits, and in many jurisdictions putting them under pressure to answer creates a problem for both of you.
- Live transactions, disposals and restructuring plans will be declined regardless of how the question is framed.
- Precise covenant headroom, tax positions under enquiry and legal disputes usually have prepared wording that will not vary.
- Ask about criteria and process where you cannot ask about outcomes: how they would decide, not what they have decided.
Fitting the occasion
Fifteen minutes at a conference
One question, no preamble, on something specific from the last results. The question about price, volume and currency works particularly well here because it is answerable in a sentence and signals that you have read the numbers.
An internal skip-level or leadership session
Ask about the mechanisms: how bad news travels, how targets are set, what has come off their desk. These help you do your own job and cost them nothing to answer.
A student or graduate audience
Career route, what has changed in the role, and what they would skip are the questions that produce generous answers. Keep valuation opinions out of it, since they cannot give them.
A supplier or adviser meeting
Nothing that resembles discovery for a proposal. The questions about cost lines growing faster than revenue and about the largest change programme will tell you more than any qualification round, and asking them well is the whole first meeting.
Afterwards
- 1Write down the exact wording of any figure or judgement you intend to use. Paraphrase drifts, and at this level the drift matters.
- 2Send anything follow-up in one short email, and copy the person who arranged the meeting.
- 3For a listed company, route anything technical through investor relations rather than back to the finance chief. It is faster and it keeps everyone comfortable.
- 4Check what you were told against the next set of results. Two data points six months apart are worth more than any single conversation.