Chief Financial Officers (CFOs) are more prepared to take on the CEO role in companies than leaders in other departments. This is what a survey by Russell Reynolds Associates indicates. The research is based on the analysis of the careers of CEOs that make up the “Standard & Poor 500” index, in the United States, interviews with leaders who have made the transition and a study of more than 2,500 profiles of financial managers around the world.
The work classified the main competencies of CEOs and CFOs and found that they score equally in at least three aspects: strategy definition, team leadership, and relationship and influence. When achieving results, finance leaders still score higher than CEOs, revealing a more balanced and assertive decision-making profile. On the other hand, the analysis shows that CEOs are more likely to take risks and seize business opportunities than CFOs.
“CFOs often showcase more awareness of organizational constraints and avoid pushing past barriers to exceed performance. Meanwhile, the lower CEO scores suggest on average, they are more likely to take risks and seize opportunities to exceed performance than CFOs.”, Managing Directors Jenna Fisher and Justus O’Brien analyzed.
Despite the few differences between CFOs and CEOs, CFO transitions to CEO are relatively rare. Russell Reynolds’ analysis of S&P 500 CEOs shows that fewer than 20% of CEOs transitioned from or previously held a CFO role.
The study also lists the following recommendations for a CFO transitioning to CEO:
- Shift to the CEO mindset
- Build a trusted team
- Let go of the CFO role
- Prepare for some solitude
- Develop new external relationships
- Lean on former CEO and Board support
- Understand the scope of your decision making
- Ruthlessly prioritize
- Strive for work-life balance
“By focusing on these three areas — Architect the Future, Influence Stakeholders, and Lead at Scale — ambitious CFOs can develop the skills and mindset necessary to successfully make the transition from overseeing the finances to overseeing the enterprise.”, the authors conclude.
Source: Russell Reynolds Associates | Valor Econômico