What Boards Look for in a CFO at an FCA Firm

What Boards Look for in a CFO at an FCA-Regulated Firm

Hiring a CFO for an FCA-regulated firm is not the same as hiring one for an unregulated business. The financial leadership requirements are all still there — but layered on top is a set of regulatory expectations that reshape what ‘a good CFO’ means in this context. This article sets out what boards of regulated firms actually look for, drawing on what we see across the CFO searches FD Capital runs in financial services.

The finance fundamentals still come first

None of what follows displaces the core of the role. A CFO at a regulated firm still has to be an excellent finance leader — command of the numbers, financial control, planning and forecasting, investor and board credibility, and the commercial judgement to help steer the business. A candidate who is regulatory-fluent but weak on the fundamentals is not a serious contender. The regulatory dimension is additive, not a substitute.

Regulatory fluency is non-negotiable

The first thing that sets a regulated-firm CFO apart is genuine regulatory fluency. In many regulated firms the CFO holds SMF2, the Chief Finance function under SM&CR, and is expected to understand the firm’s regulatory obligations as they bear on finance — regulatory capital, liquidity, regulatory reporting, and the control environment the regulator expects. A board is looking for a CFO who does not treat regulation as someone else’s department: who can sit in front of the regulator, own the firm’s financial regulatory position, and speak to it with authority.

SM&CR accountability and fitness

Because the CFO of a regulated firm typically holds a senior management function, the board is hiring someone who will carry personal regulatory accountability. That raises the bar on two fronts. First, fitness and propriety — the candidate must meet the FCA’s fit and proper standard, and the board must be able to satisfy itself and the regulator on honesty, competence and financial soundness. Second, the temperament to hold accountability — a regulated-firm CFO has to be someone who takes ownership of their regulatory responsibilities rather than treating them as a formality. Boards probe for this, because a CFO who does not take SM&CR seriously is a risk to the whole firm.

Capital, liquidity and prudential command

In firms subject to prudential requirements, boards look hard at a CFO’s command of capital and liquidity. The ability to manage the firm’s regulatory capital position, understand the prudential regime that applies, and plan for it is often the sharpest point of differentiation between a general CFO and one who can run finance at a regulated firm. For firms where capital adequacy is a live constraint, this can be the single most important competence a board assesses.

The control environment and the regulator’s expectations

Regulated firms are held to specific expectations on systems and controls, and the CFO owns a large part of that environment — the integrity of financial reporting, the controls around it, and increasingly the governance of new areas such as AI use in finance. Boards look for a CFO who builds and maintains a control environment that meets the regulator’s standard, and who can evidence it. In the AI era, this now extends to how the finance function governs and evidences its use of new tools, a dimension we explore in our guidance on AI and SM&CR for finance leaders.

Cultural and conduct leadership

Finally, boards of regulated firms increasingly look for a CFO who contributes to the firm’s conduct and culture, not just its numbers. Under the Consumer Duty and the wider conduct agenda, the tone set by senior leadership matters, and the CFO is one of the most senior voices in the firm. A board wants a finance leader who reinforces good conduct rather than treating it as a compliance overhead — someone whose commercial judgement is exercised within, not against, the firm’s regulatory obligations.

How boards test for these qualities

Boards and their advisers probe the regulated-firm dimension deliberately in a CFO process. Expect questions that go beyond the finance fundamentals: how the candidate has managed a regulatory capital position under pressure; how they have handled a regulatory information request or a supervisory relationship; how they think about their own SM&CR accountability; how they have built or improved a control environment to a regulator’s satisfaction. A candidate who answers these with concrete experience stands apart from one who treats them as hypothetical. The strongest signal is a candidate who talks about regulatory obligation as part of how they run finance, not as an external constraint imposed on it.

Why genuinely regulated-firm-ready CFOs are scarce

The combined competence set explains why these searches are demanding. The pool of excellent CFOs is large; the pool who also bring genuine regulatory fluency, prudential command, SM&CR readiness and conduct leadership is much smaller. Many strong CFOs have spent their careers in unregulated businesses and, however capable, would step into a regulated firm without the regulatory instincts the role needs. Conversely, some regulatory specialists lack the commercial finance leadership a CFO must have. The candidates who combine both are genuinely scarce, which is why regulated firms often struggle to fill these roles through generalist channels and why the searches reward specialist knowledge of where such people are.

A note on firm type within financial services

Financial services is not monolithic, and what a board prioritises varies with the firm. A CFO for a bank or a prudentially-significant firm needs deep capital and liquidity command; a CFO for a consumer-credit or payments firm needs strong conduct and Consumer Duty instincts; a CFO for an asset manager needs a different regulatory emphasis again. Part of running one of these searches well is understanding which parts of the combined competence set matter most for the specific firm — and assessing candidates against the right weighting rather than a generic regulated-CFO template.

The finance function a regulated-firm CFO has to build

Beyond the CFO’s own competences, boards increasingly assess what kind of finance function a candidate will build. A regulated firm needs a finance function that can produce accurate regulatory reporting on time, maintain the control environment the regulator expects, manage the capital and liquidity position, and — increasingly — govern its own use of new technology including AI. A CFO who can articulate how they would build and lead such a function, not just how they would run the numbers, demonstrates the systemic thinking a regulated firm needs at the top of finance. This is where the modern regulated-firm CFO role has expanded most: it is as much about designing a compliant, well-governed finance operation as about financial leadership in the traditional sense.

The combined standard, in summary

A board hiring a CFO for an FCA-regulated firm is, in effect, looking for a finance leader who would excel in any business and who also brings the regulatory dimension — fluency, SM&CR readiness, prudential command, control ownership and conduct leadership — that a regulated firm demands. Assessed honestly, few candidates clear both bars, which is why these searches reward genuine specialism. A firm that assesses for the full combined standard, and searches where regulated-firm finance leaders actually are, gives itself the best chance of a hire who can hold the role’s dual demands from day one.

What this means for the search

Put together, hiring a CFO for a regulated firm means assessing a wider competence set than an ordinary finance search: the finance fundamentals, plus regulatory fluency, SM&CR fitness, prudential command, control-environment ownership and conduct leadership. It is a more demanding brief, and the pool of candidates who genuinely combine all of it is smaller than the pool of good CFOs generally. That is precisely why regulated-firm CFO searches benefit from a recruiter who understands both finance leadership and the regulatory context.

FD Capital runs CFO and finance-leadership searches for FCA-regulated firms, assessing candidates against exactly this combined standard. Adrian Lawrence FCA, an ICAEW Fellow, leads these searches personally.

Call 020 3287 9501 or email recruitment@fdcapital.co.uk to discuss a CFO or finance-leadership appointment at an FCA-regulated firm.

FD Capital — Regulated-Firm CFO Recruitment

Fellow of the ICAEW | Placing CFOs who combine finance leadership with regulatory command, into FCA-regulated firms since 2018. We recruit permanent, interim and fractional finance leaders across the UK. 4,600+ network. 160+ placements. Shortlists in 3–7 working days.

This guide is general information for finance leaders and does not constitute legal, regulatory or professional advice. Businesses should take their own advice on their specific circumstances. Regulatory positions described are current as at mid-2026 and are developing; readers should check the FCA’s latest publications.