Mitch Cohen and Larry Firestone on Why Public Companies Need Interim CFOs

April 1, 2025
Mitch Cohen and Larry Firestone on Why Public Companies Need Interim CFOs

InterimExecs CEO Robert Jordan sat down with two seasoned finance veterans, Mitch Cohen and Lawrence Firestone to talk about the critical moment public companies face when the Chief Financial Officer job is vacant and why an interim CFO is the best way to fill the role until a new permanent hire can be brought on board.

Both Cohen and Firestone have extensive experience as permanent and interim CFOs for public companies.

This is an edited transcript of their conversation:

Bob Jordan: Mitch Cohen and Larry Firestone, my friends, thank you so much for joining me here today. I want to talk with you guys today about a very juicy topic: public companies appointing interim CFOs. What does it mean to be an interim CFO of a public company? It’s got to be very different from a private company. And I also think it’s different from permanent. But how do you see that?

Mitch Cohen: Being in a public company, you get a real good look at the company through their SEC filings, 10Qs, 10Ks, any other filings that they may put out there. So you get a good head start on what’s going on, and you get to see the good, the bad. It’s also one that’s got a lot more time sensitivity because of the very strict reporting deadlines. So you’ve got to really get up to speed very quickly.

Bob: Larry, what do you think are the differences between permanent and interim CFOs and private and public companies?

Larry Firestone: When you drop in as an interim, you know you could be replaced. They could be searching for another CFO at that point in time. You just have to acknowledge that. But there’s usually a gap, something loose in the rigging. So, the name of the game is getting the house in order. Regardless of whether you’re going to get taken out by an executive search, you still have to drive the same way.

There’s a huge difference between public and private — not necessarily with the work, but with the customers that you serve. In a public company, you’re going to be talking to shareholders. You have a CEO who has a relationship with Wall Street, you have a board, and you’ve got all the public company regimen of reporting standards. In a private company, you have the founder. But in all cases, the interim CFO has to come in and get the house in order.

Mitch: There’s also very little time. So it takes a different type of skill set. I can identify problems real quick and move forward. There’s no politics involved. Just get the job done on the interim basis.

Larry: I call us smoke jumpers.

Mitch: I like that.

Bob: What is the learning curve in terms of being a public company CFO versus a private company CFO?

Mitch: You get a pretty robust interview process. I haven’t been in one of these engagements where I haven’t met with the board, the chairman of the board, and the chairman of the audit committee. So you get a pretty good insight into what they’re looking for and how you might be able to fit in on a stopgap basis or a longer-term basis. When I say longer term, I’ve had engagements that lasted eight weeks. I’ve had engagements that lasted 14 months. So, you get a good idea from the board’s perspective what they’re looking for and how long they’re going to take for this search, if there is a search going on.

I try to identify the problems real quick. “OK, everybody, let’s get into a room. Tell me what’s going on. What is the problem? Is there a problem in this area? Is it finance? Is it FP and A? Is it SOX (Sarbanes-Oxley)? Are we understaffed? Are we overstaffed?”

I’ve been to a board where I’ve told the board, “You have to do some real quick cutting.” And they just said, “No, we can’t do that. Everybody’s doing a great job.” Okay, how about a hiring freeze? “Well, we put out a hiring freeze and it’s the wrong message.” That’s why I’m there, because I can make those recommendations real quick, and you actually look real good doing it.

Bob: Our line is interims have to speak truth to power.

Mitch: Exactly.

Bob: Larry, what do you think of that?

Larry: I think that’s spot on. On the question of the learning curve in a public company, if I take Cedo Mobile as an example, we talked to the board on March 17, and the 10K was to be filed on March 31. I was dropped in the next day. And we had to organize the team, get the 10k moving, get the auditors in line, and not miss our filing date. And, oh, by the way, talk to Wall Street about the fact that there was a huge issue in the company that led to the CEO and CFO departing.

Also, you have to talk to the whole board. There has to be an immediate chemistry where people just will trust that you’re going to do the right thing. Absent that, they shouldn’t hire you. When you’re in there, you’re an ER doctor, you’re saving the patient, you’re saving the image of the company.

But I often find that boards don’t move fast, they don’t realize that every day counts. So if you drop an interim in a day before, two days before, a week before, that’s really helpful. I always encourage the board, after I get in, don’t wait. Make the call, make the move.

Mitch: Yeah, Larry, let me just respond to that. I worked for a company on an interim basis that had operations in 15 countries, for 11 or 12 weeks, something like that. And when I finished the engagement, we sat in the room, me and the finance team, and the senior VP of finance said to me, “You know, we really wanted to hate you. Now we don’t want you to leave.”

Bob: Larry, what makes for a good public company CFO?

Larry: I think you have to have backbone. And I think you gotta understand the different constituencies you’re serving. But at the bottom line, you know, when you’re serving the board and the shareholders, there’s a higher standard that is unwavering: The numbers have to stand on their own.

Every public company wants to do better quarter over quarter. It’s not going to happen. And I think one of the characteristics I hold pretty dear is I always say, and I say it out loud, “Wall Street’s a big boy. They can handle bad news. Don’t hide it.”

And when it comes to being audited and you’re partnering with your auditors, you’ve got to remember they’re your numbers, not theirs. So everything you put out there has to stand on its own.

Mitch: You have to be able to deliver bad news in the right way. Investors on these conference calls and earnings calls are there to probe and prod, and you have to know how to handle those people. I like to be shareholder-friendly as well. There’s a bit of art to this game.

Larry:  Good news is always easy to deliver. Bad news or an altered direction for the company is always a challenge. And I think that a lot of boards, a lot of management teams, they really are afraid to shake the tree. You don’t do it maliciously or punitively. It just has to be done. You’ve got to have everybody on the same page.

Bob: If you were ranking the responsibilities of a public company interim CFO, how do you rank those responsibilities?

Mitch: You have to start with reporting because it encompasses everything. You get the numbers right, then you can talk about the numbers. Once you get your hands around the financial reporting aspect, the second domino is talking to the board, discussing those numbers, talking to external shareholders, analysts, earnings calls and things of that nature.

Bob: Larry, what do you think are the priorities of a public company interim CFO?

Larry: I don’t disagree with Mitch at all. But I think it starts with the team. I think you have to have the team embrace the fact that you’re going in a direction and you’ve got to get the plumbing right. If the plumbing’s leaking, you’re not going to have a good time. So I’ll always get a team together and let them understand that when it comes to financial reporting, we’re going to have it right. They have to understand that there’s a standard you have to hold to, and that we’re all in this together, we’re going to work it as a team.

And a lot of times what I find that once the team embraces that notion and they trust me, it’s almost a parental approach of saying, “Okay, here’s how we’re going to do this.” The end result — the aha moment, if you will — is the public reporting. It’s the 10K, it’s 10Q, it’s proxy, it’s everything. And, the team ought to be very proud of that. Oftentimes I find the team has creatively tried to work around the rules to get there. And that’s usually what we’re sussing out.

Mitch: Yeah, I feel like it’s the time for me to say, “Remember, we’re signing on these 10Qs and the 10Ks and, as well paid as we might think we are, that’s priceless.”

Larry: Yeah, money doesn’t cover an orange suit or reputation. At Cedo, they asked me, “Are you willing to sign the 10K?” And, and I said, “We’re going to run the process and if I can’t sign it, we’ve done something wrong.”

Bob: What are the risks of leaving the CFO seat empty?

Mitch: Leaving that seat open is going to expose a lot of things.  If you have a good second-in-command, possibly you can get by, but I haven’t seen where it actually worked. Generally, that second-in-command doesn’t have the experience. Everybody at that level is a really good accountant. I consider myself an average accountant. I’m okay, but if you want to go debits and credits, I’m asking the controller.

It’s difficult to find the skill set that Larry has, that I have. The priceless part of what we’re doing is the experience. Who’s going to talk to shareholders, talk to boards, talk to anybody? There’s a reason why a good CFO is in place, whether that be an interim CFO or a permanent CFO.

By the way, I don’t believe that there’s any such thing as a permanent CFO. That’s like an interim head coach. You’re a head coach. All CFOs are interim as far as I’m concerned.

Bob: Larry, what do you think? What’s the risk of leaving the seat open?

Larry: I think the risk is big. The CFO, interim or permanent, is a pillar for the company. And typically, the second-in-command — the controller, the VP or whatever the structure is — they’re generally an inward-facing role. So that’s how they organize their role in the company. And when it becomes an outward-facing role, talking to Wall Street, be it bankers, analysts or investors, you’re in a sales role. You’re selling the future of the company. Even if you’re making a turnaround for the company, you know, even if it’s bad news, you’re still selling. And that’s not innate to a lot of the financial people that populate the inner part of the engine.

Bob: Is a CFO leaving a public company always a bad sign?

Mitch: It’s a great question. I have not been in a situation where it was a good situation or where the person left because they were just moving on to greener pastures. In my experience so far, there’s always been something wrong. So I haven’t had that luxury yet.

Larry: It’s probably a bad sign, but it’s always a chance for a company to do better. Reset the table, clean up, get a little better. There are the great CFOs of the world and they stay there for 25 years or whatever. But even when I come in behind a long-standing CFO, I never find a clean house. Never.

Bob: What are the questions board members should ask an interim CFO coming into a public role to determine if someone would make a good interim cfo?

Larry: I would want to vet some of the worst situations they’ve seen and what they’ve done about it. I would want to vet their team behavior. Because sometimes if you have a mercurial personality that’s not going to work in an interim. You’ve got to roll up your sleeves and have a hands-on work style. I hate to say it, but, you know, if they come in talking about work-life balance, that’s not going to work or it hasn’t worked for me, maybe I’ve got it wrong.

Bob: What’s the flip side, Mitch? The warning signs — don’t hire that CFO for this company.

Mitch: It’s just really a personality game. One of the things I really try to do is get along with everybody, whether that be the CEO, the chairman of the board, or the janitor. Not to diminish the janitor, but there’s a difference, right? So I do my very best to get along. I was once in a situation where the CEO told me the accounts payable clerk made a mistake and should be fired. And I said, “In all due respect, I should be fired because I missed it.” So that person would never be fired under my watch. People make mistakes. It’s inherent in being a human being. We just want to limit them as much as possible.

Larry: I’ve been in that same situation, Mitch. I always say nobody’s coming here to deliberately do bad work. They need a little guidance. They need a little structure. There’s always something in the plumbing that’s not working right that allows that.

Bob: Any other pointers we should throw out there? We’re specifically talking to the board of directors.

Mitch: Don’t jump in and hire the next permanent CFO because you think it’s good for appearances. That’s never going to work out.

I had a client where it was a short stint — seven to nine weeks — and they hired somebody. And I’m not exaggerating — three weeks later, they called me and said, “Can you please come back?” There’s this tendency to think that you need somebody in that seat very quickly, where you have a guy like Larry who could just easily fit it on an interim basis. So take your time.

Larry: If I were advising a board — and I’ve been on a board that to hire an interim — when the interim comes in, don’t treat them like an interim. Treat them like part of the fabric and let them run, even if you’re looking for a permanent CFO. The notion that somebody’s there temporarily colors the amount of engagement that you can get out of some folks. Not all folks, but some folks. And so I always try and become part of the fabric and then when they replace me, it’s great. Guess what? I met a whole bunch of great people, and we turned the company around or we solidified the situation or we plugged the gap.

Bob: Mitch Cohen, Larry Firestone. You guys are awesome. Thank you so much. Appreciate your expertise.

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