CFOs split on moving up to CEO job
North American CFOs appear split on whether they’ll get – or even want – the CEO job.
While 40% said they would like to succeed their current chief executive, 35% said they would not want that promotion, and 24% said they weren’t sure. That’s according to the recent Deloitte CFO Signals report, a quarterly gauge of CFO sentiment. The mid-August survey measured the responses of 124 CFOs, 73% of whom were from public companies.
Amongst the CFOs who expressed interest in becoming the company’s next CEO, about 40% believed they will get the job. Also, 60% of those CFOs believed their CEO would endorse them now for a CEO role in a different company.
CEO hires who have previous experience in finance increased in the past year, according to Crist|Kolder Associates’ annual Volatility Report. The report, which examines data on executives at 668 US companies, showed that 31.4% of CEOs hired in 2013 had previously served in a finance role, an increase from 26.5% who had such experience in 2012. That number is lower than in 2010, when 39.3% of CEOs hired had finance experience.
For those not as interested or confident that they can land a CEO job, the mood is different. In the Deloitte survey, 28% of CFOs who don’t want their current CEO’s job believe the CEO would recommend them for a chief executive role in another company.
And amongst the entire survey sample, just 15% expect to be named their company’s next CEO.
The survey also addressed CFOs’ thoughts on strategy and decision-making. Nearly all CFOs (97%) believe they are welcome to talk strategy with their CEO, and 87% said their CEO relied on the CFO as a “top sounding board.”
CFOs are being heard as companies make strategic decisions, especially corporate or cross-unit decisions, the survey showed. CFOs reported offering the most analysis and information on the topic of which businesses to grow or shrink. They reported having an increasing voice in decisions involving which industries to enter or exit.
While nearly three-quarters of CFOs report having a voice in decisions related to “where to focus innovation efforts,” they are rarely involved in implementing decisions related to innovation. A 2012 report is one of several stressing the need for CFOs to improve communication skills and strategic thinking to adapt to their changing role.
CFOs in the Deloitte report offered three key ways to develop a strong relationship with their CEO:
- Be the CEO’s right hand: Understand how the chief executive thinks about critical company issues.
- Create value: Take a business-minded approach and collaborate with others.
- Set the right tone: Demonstrate an open communication style and build trust by backing up analysis with facts.
The most common words mentioned by respondents when asked how to build strong relationships, Deloitte said, were: “communicate,” “align,” “trust” and “honest.”
Related CGMA Magazine content:
“The Traits That Separate CEOs From Other Leaders”: Executives have traits that undoubtedly helped get them leadership positions, but how do those traits manifest themselves differently in leaders who become CEOs? A report by Russell Reynolds Associates, a global executive search firm, describes the traits that make CEOs different.
“How to Make the Transition From CFO to Non-Executive Director”: In governance regimes where executive directors are the norm, CFOs get a useful first taste of the boardroom. The next step is to broaden that experience beyond their own companies by taking on non-executive director roles. Two executives offer tips on making the transition.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.