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CFOs increasingly taking CEO role

CFOs ARE MORE LIKELY to secure the coveted CEO position thanks to changes in the internal and external business environment, according to a new survey.

The BearingPoint Institute study found that a quarter of European Fortune Global 500 CFOs climbed to the top of the career ladder within the last decade. In order to reach the pinnacle, 61% switched to a new company, while a third changed sector.

The survey looked at the career paths of 178 CFOs from European Fortune Global 500 companies from 2004 to 2013, which were then plotted against the performance of the STOXX Europe 600. It found that CFOs are more likely to rise to CEO during periods of economic uncertainty.

Franz Hiller, partner and global service line leader for finance, risk & compliance at BearingPoint, said the overall CFO-to-CEO transition rate of 26% was higher than might be expected: “Historically, CFOs in Europe were often overlooked for the top job because of their largely operational role description. But changes in the internal and external business environment have raised the profile of the function.

“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 organization, 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.”

Almost a quarter (22%) of the CFOs that became CEOs made the transition within banking & capital markets, the report found, but the sector was also open to promoting CFOs from other industries to a CEO position.

Andreas Rindler, partner and head of financial services for BearingPoint in the UK, said: “If you intend to become a CEO in financial businesses, what matters most is your expertise in the finance function. This expertise must not necessarily be collected within the industry, but also finance experience in other industries counts.

“From this point of view banking & capital markets businesses are more open to promote CFOs from the outside world.”

But sector knowledge still remained an important factor with two thirds of CFOs promoted to CEO from within their industry. Prominent examples of CFO-to-CEO transitions within the same sector include Ian Livingston (formerly BT Group), Joe Kaeser (Siemens), Frédéric Oudéa (Société Générale) and Kurt Bock (BASF). Ian Dyson left the Marks & Spencer CFO role to serve as chief executive of Punch Taverns.

 

 

 

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