We are a lean team, so our CFO also sits in our HR and Compliance seat. As we prepare for due diligence, our legal advisors say this combined seat creates a major conflict of interest. How do we split these seats on the Accountability Chart when we cannot afford to hire a full-time HR Director?

Question

Tyler Smith · Accepted Answer

Lean organizations often combine unrelated functions under one person out of necessity, but a combined finance and compliance seat is a major red flag for buyers. This setup lacks proper checks and balances, which can lead to serious compliance issues during due diligence.

To solve this, you must first separate the roles on your Accountability Chart. Structure the chart for the ideal future-state of the business, not based on your current budget or headcount. Create two distinct seats: one for Finance and one for Human Resources and Compliance. Each seat must have its own five clear roles and responsibilities.

Since you cannot afford to hire a full-time HR Director, you do not need to leave the seat empty or keep your CFO in it. Instead, look at creative staffing options. You can place a fractional HR professional in that seat, or you can outsource the tactical compliance work to a professional employer organization.

The name on the box might be an external partner or a fractional specialist, but they must still report directly to the Integrator and be held accountable to the same standards as a full-time employee. By separating these seats on your chart, you show buyers that you understand proper governance, risk management, and operational structure, which protects your valuation and ensures a smoother due diligence process.