Converting an interim CFO into the permanent hire without running a proper search is one of the most common and costly mistakes boards make. The person who stabilised your finance function in a crisis is not automatically the person who should lead it for the next five years, and treating those two roles as the same job is where boards get burned.
This is not an argument against interims. A strong interim can save a business. It is an argument against the quiet drift from "they are doing well" to "let us just make it permanent" without ever testing the decision.
Why do boards default to rehiring the interim?
The pull is emotional and practical. The interim is in the building, the board knows them, they have delivered under pressure, and running a full search feels like extra work when a competent person is already sitting in the chair.
Relief is the real driver. When an interim arrives during a cash crisis, a failed audit or a sudden departure, they lift a weight off the board. That relief gets mistaken for a long-term fit assessment. The board stops evaluating and starts appreciating.
There is also cost anxiety. Boards assume converting the interim is cheaper than a search. It rarely is once you count the exit costs of a wrong permanent hire.
What is the difference between an interim CFO and a permanent one?
They are different jobs that happen to share a title.
An interim is hired to fix a defined problem in a defined window. Stabilise cash. Rebuild the reporting. Get through the refinancing. Deliver the audit. The skill set is diagnostic, fast, and often quite blunt. Good interims are comfortable being unpopular because they are leaving.
A permanent CFO is hired to build. They set a multi-year finance strategy, recruit and retain a team, partner with a CEO through good and bad quarters, and carry the relationships with lenders, investors and the board over time. That work rewards patience, consistency and cultural fit.
The traits that make someone a brilliant interim, speed, detachment, a bias to action, can be exactly the traits that make them a poor long-term steward. And the reverse is true. A superb permanent CFO can be too slow and too consensus-driven to fix a burning platform.
What goes wrong when the interim becomes permanent by default?
The pattern is predictable.
First, the honeymoon ends. The urgency that gave the interim licence to act fades, and the same directness that felt decisive now feels abrasive to a team that has to live with it.
Second, the fixer runs out of things to fix. Some interims are genuinely energised by steady-state leadership. Many are not, and within a year they are visibly restless or already looking.
Third, the board never priced the alternative. Because there was no search, nobody knows what a genuinely excellent permanent CFO for this business would have looked like. You cannot tell you have settled if you never saw the market.
A realistic example
A PE-backed services business lost its CFO three months before a refinancing. An interim came in, rebuilt the cash forecast, salvaged the lender relationship and got the deal done. The board was, rightly, grateful.
Without much debate, they made the interim permanent. The operating partner reasoned that the interim knew the numbers and the risk of change felt high.
Within fifteen months it unwound. The finance team, which had tolerated a demanding style during the crisis, started leaving. The interim had little appetite for the systems investment and talent building the next phase needed. The board eventually ran the search they should have run at the start, paid a second exit, and lost the better part of two years.
The lesson was not that the interim was bad. He was excellent at the job he was hired for. The board simply never asked whether that was the job they now needed filled.
How should a board handle it instead?
Treat the permanent decision as a real decision, not a formality.
Run a proper search, and let the interim compete in it. If they are the right long-term hire, a competitive process will confirm it and give them a genuine mandate rather than a default one. If they are not, you will know before you commit.
Benchmark against the market. Even a shortlist of two or three external candidates tells you what excellent looks like for your stage, sector and investor profile. This is exactly where an independent view from a specialist like Harper May earns its keep, because we assess the interim on the same terms as the field.
Define the next role, not the last one. Write the brief around the coming three years. Growth, systems, exit readiness, team building. Then ask honestly whether the interim's strengths map to that brief.
Be explicit with the interim from day one. The best interims respect a clear process and often prefer it. The ones who resist any assessment are telling you something useful.
If you want a sense of the permanent finance leaders available in the current market, our live finance roles and candidate pipeline are a good place to calibrate.
Common questions
Should we never hire the interim permanently?
No. Sometimes the interim genuinely is the best permanent choice. The rule is that you should reach that conclusion through a proper assessment against the market, not by default because they are already there.
Does running a search insult a good interim?
A credible interim expects it. Being asked to compete for a five-year mandate is normal and fair. A strong process gives the successful candidate real authority. If someone treats assessment as an insult, that is itself worth noting.
How long should we wait before deciding?
Decide the process early, even if the appointment comes later. Agree at the outset that the permanent role will be searched, so nobody drifts into an unexamined conversion after twelve comfortable months.
