Why More CFOs are Becoming CEOs

33% of FTSE 100 CEOs have previously served as CFOs. This marks an increase of 21% compared to 2019. Here’s why this trend is on the rise.

Additionally, consider this intriguing data point:

Among the 674 Fortune 500 and S&P 500 companies, 8.4% of vacant CEO positions were filled by CFOs in 2023—the highest percentage recorded since 2013.

In my opinion, there are several compelling reasons why CFOs often transition into CEO roles:

  1. They “run” the numbers. They provide a sense of stability and control to the board.
  2. Due to their responsibilities, CFOs typically have a strong rapport with the board, facilitating a smoother transition into the CEO position.
  3. Many companies are undergoing restructuring efforts, emphasizing the need for efficiency and cost reduction—areas in which CFOs excel.
  4. CFOs are inherently risk-averse, making them well-suited to safeguard the business during periods of uncertainty.

However, research from Spencer Stuart suggests that CEOs promoted from the CFO role may not drive top-line revenue growth as swiftly as those from other backgrounds, especially in the initial years.

The reason is mindset.

CFOs who possess a mindset geared towards preserving the status quo may find it challenging to shift towards a growth-oriented mindset needed to pave the way for a more ambitious future for their companies.

Your view?

By the way, I’ve just uploaded it on YouTube my conversation with Ravi Venkatesan, CEO of Cantaloupe. Ravi demonstrates the importance of consciousness in leadership. I can guarantee this is not a common conversation you have with a CEO! Watch it here

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