Forward from Finance: From CFO to CEO
January 17, 2025 – CFOs transitioning to CEOs are uniquely positioned to lead organizations with a strong foundation in financial expertise and strategic decision-making. Their deep understanding of financial health, risk management, and capital allocation allows them to make data-driven decisions that align with long-term organizational goals. CFOs often have significant experience communicating with boards, investors, and stakeholders, giving them an edge in managing external relationships. This financial acumen can be a critical asset in navigating economic uncertainty, optimizing resource allocation, and driving sustainable growth.
“There are many reasons why I love my job but prime among them is the opportunity to work with talented leaders day in, day out,” said Jean Chiswick, a key member of Spencer Stuart’s retail, consumer, financial services and PE practices, said in recent report. “Sitting down with different people from all walks of life, all committed to doing good, all determined to make a difference, is something that I’ll always treasure.”
While these discussions are often about helping organizations finding the right people for their own unique needs, Ms. Chiswick notes that the conversation often turns to how individuals can map their own different pathways and options for their future. After all, few careers progress exactly as envisaged. Plans shift, circumstances change, ideas evolve.
“A good example is the well-trodden journey between a CFO and CEO,” Ms. Chiswick said. “This is a subject that my colleagues and I have been exploring in recent months and is one that, perhaps inevitably, has sparked many different findings and perspectives.”
The move from CFO to CEO is well-established — 19 percent of ASX100 CEOs were appointed from a CFO role as an internal promotion or successor. But while CFOs often possess many of the key traits and skills necessary for a seamless switch into the CEO hot seat, Spencer Stuart has found that success is by no means guaranteed. When it comes to top-line growth, the firm’s research shows that only eight percent of CEOs promoted from the CFO role steer their companies into the top-quartile of top- line growth.
Ms. Chiswick explains that understanding why this is the case was just one of the many talking points at a dinner she had hosted last month. Attended by guests who have worked in both the CFO and CEO roles during their careers, Spencer Stuart was able to dig into their own experiences and reflections, their lessons learned and recommendations for the next generation. So, what did the firm find out?
Strengthening a Critical Pathway
“It’s easy to see why nomination committees are often swayed by a CFO’s candidacy for a CEO role,” Ms. Chiswick said. “After all, the CFO — much like the CEO — has full oversight over a company’s functions and operations. They also understand the numbers and performance frameworks, have strong relationships with key stakeholders and work shoulder-to-shoulder with their CEO.”
Related: CFO Turnover Reaches Three-Year High
But while Spencer Stuart’s guests agreed that these factors remain potent, they also stressed that ambitious CFOs should not rest on their laurels. “On the contrary, they need to proactively seek out different ways to strengthen their chances for successful transition,” said Ms. Chiswick. “One priority should be to combine their financial expertise with broader operational experience. Some time on the frontline of delivery, ideally leading an operation, program or portfolio that provides breadth, can be valuable in developing a different perspective and honing a fresh, innovative mindset.”
Jean Chiswick is a key member of Spencer Stuart’s retail, consumer, financial services and PE practices. She has more than 20 years’ experience in C-suite leadership assessment and succession. Ms. Chiswick also leads the financial officer practice across Asia Pacific and brings expertise in appointing finance, risk and governance leaders in publicly listed, multinational, private equity and private sector companies across industries.
“Similarly, a step change in interpersonal impact was seen to be helpful, including clarity and inspiration in communications skills,” she said. “Although CFOs will likely be well versed in making presentations to financial stakeholders, the ability to share a compelling vision and strategy, and connect differently with diverse audiences is critical.”
“Another area that CFOs should focus on is how they can develop the capability of their teams,” Ms. Chiswick said. “Interestingly, this is often the lowest capability in executives globally yet it’s so fundamental to the success of an organization. Managing the finance function is one thing, leading a whole-company workforce is something else entirely.”
Financial Advice
It’s also important to note that when it comes to a CEO succession, nomination committees will be considering many contenders, not only from inside the business but outside too, according to Ms. Chiswick. “Much also depends on the industry and business cycle the organization operates in, as well as macro-economic factors,” she said. “If the wider economy is enduring a period of turbulence then a CFO-turned CEO can help organizations navigate moments of financial stress and volatility. But if growth is prevalent and new investment opportunities are dominating the horizon, a CFO may not be the first choice.”
This all means that any CFO should not assume that their future ascent is assured, Ms. Chiswick explains. “The sheer allure of the CEO role, its enduring attractiveness to the best and brightest, means that there will always be fierce competition when succession planning gets underway,” she said. “And that’s a good thing, surely. Any organization, big or small, private or public, requires a tailored and diverse blend of talent at its decision-making tables, starting with the CEO. Ambitious CFOs need to recognize this reality and seek to maximize their chances — there’s no time to waste.”
Related: A Look at How the CFO Role in Private Equity is Evolving
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
