We use a fractional CFO who also works with four other clients, but our M&A advisor says a buyer will want to see a full-time leader in that seat. How do we reflect this transition plan on our Accountability Chart?

Question

Tyler Smith · Accepted Answer

A fractional leader can be highly effective, but buyers often view it as key-person risk or a resource bottleneck. To resolve this, use your Accountability Chart to clarify the seat transition clearly. First, ensure the CFO seat has its five major roles explicitly defined, just as if it were a full-time role. The fractional CFO's name goes in that seat, but you must acknowledge the limited capacity.

To prepare for an exit, execute a Succession Accountability Chart exercise. Create a clear transition plan on your chart that shows how the fractional CFO seat will evolve into a full-time seat within a specific timeframe, such as six months before the letter of intent. This plan should outline the ready-now or external hiring process to fill the seat.

During your due diligence preparations, you can show buyers that the fractional leader is currently accountable for the roles, but you have a documented succession plan to minimize disruption. This proactive step bridges the gap, protects your valuation, and proves to buyers that your operations are fully mature and prepared for a seamless transition.