BlueSteps chats with AESC executive search consultants about the latest trends for CFOs and finance executives. In this article, we focus on whether or not it's possible for CFOs to make the transition to CEO. Download the full white paper, "Executive Search & Career Forecast: Inside the Chief Financial Officer Role" for more.

cfo_career_white_paper-coverJames Langston and Julie Kanak, Diversified Search/AltoPartners, USA
Historically, and somewhat surprisingly from our perspective, very few CFOs succeed CEOs, driven by a typical lack of full P&L responsibility on their resumes. Current trends should help reverse this as the CFO is becoming increasingly able, aware of and involved in commercial and operational issues that they have been historically dissociated from.

If a CFO sets his/her eyes on the CEO chair, he/she should pursue a well-rounded experience that includes as much operational involvement and business collaboration as possible. They should focus on building relationships and an institutional following along the way. These CFOs should strive to burnish a reputation—above, below and laterally—as not only a recognized financial expert and empathetic business partner, but also as a motivational and inspirational leader who possesses a broad array of skills and experiences, from board interaction and business strategy, to talent and leadership identification and development.

Kisoon Im, Boyden, South Korea
CFOs in general are still viewed to have certain limitations on their knowledge of the business as a whole. Therefore, CFOs are usually not viewed as a priority successor to the CEO. For a CFO to be better prepared to advance to CEO role, he/she needs to upgrade his/her role from accountant to commercial leader and to build up a recognition and reputation as a strategic business partner to CEO.

Bernhard Dedenbach, Partners to Leaders, Luxemborg, Zurich and Geneva
Although we can see a growing number of CFOs following their former superior into the CEO function, this is not a natural trend or a logical move per se. Often, the CFO becoming CEO has been chosen because of poor or insufficient financial performance of her/his predecessor, thus bringing the company back on the track of profitability and cost control. Of course, the best preparation to succeed the CEO is to work as her/his trusted advisor in the CFO function. Companies that select the CFO as future CEO often put an emphasis on continuity and confidence in the executive team, along with a desire for a different leadership style.  Regardless whether the CFO will become the future CEO or not, she/he needs to demonstrate superior managerial skills in order to operate successfully in the long term. She/he must always be aware that position and rank are no entitlement, and in a modern working environment hierarchy is much less important than personal accountability and commitment. Thus, it transpires that only highly committed and successful CFOs can potentially move to a CEO position in the future.

Samuel Dergel, Stanton Chase, USA and Canada
CFOs become CEOs when the biggest challenge or opportunity facing the company is financial. Other executives are more likely to become CEO when their area of expertise is most important (sales, operations, technology, etc.).

For CFOs to be properly considered for CEO roles, they need to plan to expand their core competencies, and prove it to stakeholders. COO can be a good stepping stone in many organizations.

The best way for a CFO to become a first time CEO is to be promoted into the role internally. It’s rare to have a CFO hired on the outside as a CEO.

I highly recommend executive coaching for CFOs who are on the CEO track.


Caroline Raggett, Russell Reynolds Associates, Hong Kong
Many finance chiefs have the technical expertise needed to run a business, but are sometimes missing the soft skills needed to be the leading face of a company.

According to our recent psychometric assessment of 129 CFOs from top corporations worldwide, there are some widely shared attributes amongst this population that could positively impact a CFO’s performance in the CEO role: a data-driven approach, a strong orientation towards details and a logical mind. However, there are other attributes of a great CFO that could hinder their performance as CEOs: cautiousness, tendency to follow rules and ambivalence to being the center of attention.

A CFO’s objective and logical approach to problem solving is good preparation for the CEO role as they must grapple with more complicated business environments and master skills typically demanded of CEOs (managing external relationships, understanding the main drivers of business, demonstrating leadership and confidently making decisions–even unpopular ones). They can also address the quest for new revenue streams by utilizing a data-driven approach to identify a company’s innovation sweet spot.

Mike Beaumont, Search Partners International/AltoPartners, South Africa
If the CFO is/gets broadly involved in the business at a strategic and operational level and, in addition, has the leadership and interpersonal skills to inspire teams and build sustainable businesses in the future, then absolutely. Those who have this aspiration need to focus on building these skills. An advantage to appointing a CFO as the next CEO, is that it offers the company a hedge against a potentially expensive loss of institutional knowledge.  

I once had a career conversation with a brilliant CFO in which we debated whether he would prefer to be South Africa’s premier CFO or whether he should aim for a future in the top job (CEO role). His decision was to focus on being the very best CFO he could be–and this he did. Ironically, he was then appointed CEO, did an outstanding job over a number of years and finished his career as a respected non-executive chairman of a prominently listed group. The reason was that, not only did he have both the financial and commercial attributes of a successful CFO, but he was also a fine leader, with inspirational person-management skills!

Alan Kaplan, Kaplan Partners, USA
The CFO to CEO paradigm has always fascinated me because in most cases you have really smart, talented people that are, in a decent sized company, managing a decent number of people. In many organizations, the CFO knows as well as anyone where and how the company makes money. Many board directors who would make those decisions have a lot of confidence in their CFOs and the way they can explain the business trends to the board. As a result of that confidence that boards have in the CFOs and CFOs have in themselves, many CFOs fancy themselves logical successors to the CEO because they understand the drivers of the business.

However, I believe there’s a huge difference between understanding the business and numbers and managing the people on the front lines while delivering the business strategy. All of that comes down to soft skills: management skills, leadership skills and developing successors. Being CEO involves much more than understanding the technical and financial aspects of the business.

For CFOs who aspire to the CEO role, you need to get some line responsibility baked into your role. For example, at a financial institution, a lot of times you’ll see a CFO take over wealth management, insurance, mortgage businesses, etc. to get some line experience. Or you’ll see CFOs in manufacturing companies taking on some operational responsibility. Without getting your hands dirty in some element of the business, P&L oversight, operational responsibility in a meaningful way, I think it’s a hard leap to make.

CFOs are most likely going to make the transition to CEO in their current company. You almost never see a CFO become CEO of another company as an external hire, except occasionally in the financial services industry. The key boxes to check for becoming a qualified CEO successor are customer experience, operational oversight and real P&L management responsibility.

Sonal Agrawal, Accord/AltoPartners, India
With their overview of all operating parameters, CFOs are increasingly being considered for CEO roles. Apart from the core finance and strategy skills, companies would look for broad functional experience, strategic project experience, international exposure and a well-documented ability to manage and develop people. Companies will additionally seek a broad set of relationships, excellent communication skills and that undefinable charisma that most CEOs exude.

Jo Baxter, Hobson Leavy, New Zealand
There is an ongoing move to appoint strategic, commercial and external facing senior leaders to head the finance function. The CFO also needs to have strong stakeholder management skills and be collaborative. Therefore, it is increasingly more realistic that a high performing CFO will be a logical successor to the CEO. However, this is not necessarily the case, particularly in export-oriented businesses where a sales and marketing background is deemed essential in the CEO function. To prepare for a CEO role, CFOs need to take on a second-in-command role, build strategic capability and gain an in-depth understanding of the whole business. People, leadership and culture building skills/experience will also benefit a CFO who is seeking to achieve CEO status.  

For more one-on-one interviews and commentary from leading executive search consultants, who specialize in placing CFOs and finance executives, download the full white paper, "Executive Search & Career Forecast: Inside the Chief Financial Officer Role".



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