When a chair reverses a CFO's decision, the issue is almost never the decision itself. It is usually a breakdown in how authority, information and trust were set up between the board and the finance function long before that moment.
What follows is an anonymised case from a £120m PE-backed services group. The names and numbers are disguised, but the pattern is common. We share it because the lesson matters more than the story.
What was the situation?
The business was a multi-site services group, roughly £120m in revenue, backed by a mid-market private equity house two years into the hold. The CFO had been in post for around 14 months, hired shortly after completion to professionalise reporting and prepare the group for a bolt-on acquisition strategy.
The chair was a seasoned operator installed by the fund. Experienced, well regarded, and close to the deal team. On paper, this was a strong pairing.
The flashpoint was a decision on the finance system and the timing of a large integration project. The CFO wanted to pause a planned ERP migration and redirect the budget toward strengthening the core finance team and cleaning up the acquired entity's ledgers first.
The chair reversed that call. The migration went ahead on the original timeline.
What actually went wrong?
The CFO's reasoning was sound. Migrating onto a new system while the acquired company's numbers were still unreliable risked baking bad data into a new platform. Fixing the foundations first was the more defensible sequence.
But the reversal did not happen because the chair disagreed on the technical merits. It happened for three reasons that had nothing to do with ERP.
First, the CFO had not brought the board along. The recommendation arrived as a near-final decision rather than as an option the board had helped shape. The chair felt presented to, not consulted.
Second, the numbers underneath the recommendation had wobbled before. Two prior reforecasts had moved materially between board meetings. That eroded confidence in the CFO's judgement on timing, fairly or not.
Third, the deal team had already told the fund's investment committee that the systems work would be complete before the next bolt-on. The chair was protecting a commitment made higher up the chain.
So the reversal was really about trust and alignment, not about ERP sequencing.
Was the chair right to intervene?
A chair is entitled to overrule a CFO. That is what governance is for. The question is whether the intervention strengthened the business or simply won an argument.
In this case the intervention was defensible but poorly handled. The chair reversed the decision in the meeting, in front of the wider leadership team, without a private conversation first. The CFO's authority took a visible hit.
Within six months the CFO had left. The migration went ahead, hit exactly the data problems the CFO had flagged, and the group spent the following year unpicking them. The chair's instinct to honour the investment committee commitment was understandable. The execution cost the group a capable finance leader and a year of clean reporting.
The honest read is that both sides were partly right and both handled it poorly.
What should the board have done differently?
The reversal should have been a private conversation, then a joint position. If the chair and CFO could not agree, the disagreement should have been surfaced to the board as two options with trade-offs, not resolved by rank in the room.
The deeper fix sits earlier. The reforecast volatility should have been addressed head on, because it was quietly draining the CFO's credibility. A chair who trusts the numbers rarely needs to overrule the person producing them.
There was also a hiring lesson. This CFO was strong technically but had limited experience managing a PE board and an active deal team pulling in a different direction. That gap was visible at appointment and was not tested hard enough during the process. We write more about that fit question across our work at Harper May.
What is the lesson for CEOs and PE operating partners?
The cleanest lesson is this. Reversing a CFO's decision is sometimes correct, but if you find yourself doing it more than rarely, the problem is upstream of the decision.
Either the CFO is the wrong fit for a board-heavy, PE-owned environment, or the board has never agreed how decisions of that size get made. Both are fixable, but not in the meeting where the disagreement lands.
When you hire a CFO into a PE-backed group, test three things beyond the numbers. Can they manage a demanding board without losing their own judgement. Can they disagree with a chair privately and constructively. And will they bring the board into big calls early rather than presenting finished decisions.
When those three are in place, reversals become rare, and the ones that do happen strengthen the relationship rather than damage it. If you are building a finance leadership team for that kind of environment, our current mandates reflect the profiles that tend to hold up.
Common questions
Can a chair legally overrule a CFO?
Yes. The CFO runs the finance function, but the board sets direction and the chair leads the board. Governance allows a chair, with the board, to overrule an executive decision. The test is whether it is done well, not whether it is allowed.
Does a reversed decision mean the CFO should leave?
Not on its own. A single overruled call is normal. A pattern of reversals, or one handled publicly enough to break the CFO's authority, usually signals either a fit problem or a governance gap that needs fixing before the relationship recovers.
How do you hire a CFO who can handle a PE board?
Probe how they have managed disagreement with chairs and investors in past roles. Ask for specific examples of decisions they lost and how they responded. Board resilience is a distinct skill, separate from technical finance ability, and it should be assessed directly.
