A quarter of CFOs transitions to the CEO role, according to research from BearingPoint. There is a gap though - more than two-thirds of the CFOs would take on the role of CEO when asked, and more than three-quarters believes their financial background increases their chances to become CEO.
The BearingPoint Institute, part of management and technology consulting firm BearingPoint, recently released a new research into the transition of Chief Financial Officers (CFOs) to Chief Executive Officers (CEOs). For this research, the institute surveyed the career paths of 178 CFOs from European Fortune Global 500 companies from 2004 to 2013.
The study shows that of the 178 CFOs from 2004, more than a quarter (26%) assumed a CEO role in the last decade, for which a two-thirds changed companies and one-third even changed sectors. This can partly be explained by economic uncertainty, as this will lead to the willingness to leave an employer for a new career path.
Of the CFOs and Heads of Finance surveyed, more than two-thirds (69%) would immediately take on the role of CEO when offered. 82% believes that their background in finance and accounting will increase their chances to transition to an executive position, and 79% believes it will increase their chances of promoting to CEO.
BearingPoint’s research also reveals that some industry sectors are more open to the idea of a CEO with a financial background, such as the Banking & Capital Markets. Almost one quarter (22%) of the CFOs that became CEOs made the transition within this sector, although this sector was also open to promoting CFOs from other industries to a CEO position. “It appears that to become CEO in a Banking & Capital Markets business, expertise in the finance function can be just as helpful as specific prior experience within the sector. In general though, sector knowledge is still important when it comes to making the leap to the top. Even though they might transfer to a new employer, two thirds (67%) of CFOs were promoted to CEO within their industry,” says Franz Hiller, Partner and Service Line Leader for Finance, Risk & Compliance at BearingPoint.
Changing face of the CFO
According to Hiller, the enhanced role of CFOs makes them more likely candidates for the top job: “The scope of CFO responsibilities today often also encompasses regulatory affairs, the compliance realm and a company’s digitalisation agenda. By setting up their finance departments to add strategic value to the organisation, the role of CFO has been transformed to become a true business partner and co-pilot of the enterprise. It is only natural that they have therefore become much more likely candidates for the CEO position along the way.”