The Bar Is Too Low

The building products industry is underutilizing the compensation dollars it spends on CFOs. Not because those dollars are too high, but because the return on them is too low.

In most industries, the CFO is a strategic operator: a leader who shapes how the business grows, where capital goes, and which parts of the operation get fixed next. In building products, too many companies still treat the role as the senior keeper of the books. That gap is costing manufacturers and distributors real EBITDA, and it is time the benchmark for the role rose to match how every other industry already views it.

The modern CFO should be measured by COO-level impact on the business. The question is not “Are the numbers right?” The question is “What business, operational, and sales improvements has this person led?”

A Clean Close Is the Ticket to Admission

Let’s give credit where it’s due. Your month-end financials close in five to ten days. Your quarterly filings go out with few corrections. A/R and A/P are under control. Inventory shrink is in check.

That’s great. It is also the baseline.

Accurate, timely financials are the minimum requirement for the role, not the measure of excellence in it. Every one of those achievements is a report on what’s in the rear-view mirror. You need a clear rear-view mirror to drive safely, but no one has ever steered a company forward by staring into it. Reporting only what already happened is not where a CFO defines their value. A CFO who delivers only a clean close is doing the job of an excellent controller, while drawing the compensation of an executive. Companies paying for strategic leadership and receiving accounting stewardship are leaving value on the table every single month.

What COO-Level Impact Looks Like

The best CFOs are curious leaders. They don’t wait in the finance office for operating leaders to bring them problems. They spend a large share of their time on the plant floor, in the branch, and in the sales meeting, partnering with operators to find where the business is leaking margin and where it could be growing faster.

In practice, that looks like a CFO who:

• Works with sales leadership on pricing discipline, customer and product profitability, and where to focus the team’s time.
• Partners with operations on throughput, labor productivity, freight, and procurement, and builds the metrics that make improvement visible.
• Turns working capital into a growth lever, freeing cash tied up in slow-moving inventory to fund capacity or acquisitions.
• Leads the business case and the follow-through on capital projects, not just the spreadsheet that approves them.

This CFO keeps one eye on the rearview mirror and both hands on the wheel, looking through the windshield at the road ahead. They don’t just report EBITDA. They help create it.

The Over-Promotion Problem

Too often in our industry, controllers and senior accountants are promoted into the CFO seat because of tenure or loyalty, not because of demonstrated performance and business impact. The intent is understandable. These are trusted people who have kept the company’s finances in order for years.

But trust and tenure are not the same as strategic capability. When the CFO seat is filled as a reward rather than a deliberate hire for impact, the entire leadership team feels it. The president loses a true thought partner. Operating leaders lose an ally who can help them make the case for change. And the company loses the improvements that a commercially minded CFO would have driven.

At best, it’s a huge lost opportunity. At worst, it quietly holds the business back for years.

Questions Every President and CEO Should Ask

If you lead a building products company, take an honest look at your CFO through this lens:

• How many operational improvements has your CFO personally led in the last two years?
• What sales initiatives have they shaped, and what did those initiatives add to the top line?
• How have they directly contributed to growing your EBITDA, beyond reporting it accurately?
• How much of their week is spent with operating leaders versus inside the finance function?
• Could they step into your role tomorrow?

That last question matters most. A strong CFO should be a true succession option for the president role. They already see the whole business through the numbers. The great ones also understand it through its people, plants, customers, and markets. If your CFO couldn’t credibly run the company, you don’t have a CFO problem only. You have a succession gap.

Raise the Benchmark

The building products industry doesn’t need to pay CFOs less. It needs to expect more from them, and hire, develop, and promote accordingly. Make the clean close, and the rear-view reporting it represents, the floor. Measure your CFO by the operational and commercial improvements they lead. Ask them to operate like a COO, partner like a sales leader, and think like a future president.

The compensation dollars are already being spent. It’s time the industry got the full return on them.