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With more CFOs being elevated to CEO, two search experts break down the most common paths to the top job
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With more CFOs being elevated to CEO, two search experts break down the most common paths to the top job
Jan 18, 2024 7:08 PM

  The trend of CFOs transitioning into CEO or president roles is a growing phenomenon in the corporate world, as evidenced by recent appointments such as Murray Auchincloss at BP, who was promoted from CFO to CEO. Data from executive search firm Russell Reynolds Associates reveals that in 2023, 24% of S&P 500 CFOs changing jobs moved to CEO or president positions, a slight decrease from 33% in 2022 but still significantly higher than the 8.8% in 2021. The report suggests that the surge in CEO turnovers in 2022 created more opportunities for CFOs to ascend to the top leadership role.

  Another notable shift observed by RRA is CFOs taking on divisional CEO and COO roles en route to becoming CEOs or presidents. Jenna Fisher, Managing Director and Head of the CFO practice at RRA, pointed out that there has been a move away from capital markets-focused CFOs towards those with strong operational expertise over the past 18 to 24 months.

  Crist Kolder Associates also conducted research which showed that among current Fortune 500 and S&P 500 CEOs, 8.4% were previously CFOs, an increase from 5.8% a decade ago. This pathway is particularly common in consumer service industries and less so in healthcare. The study also highlights that external hiring for both CEO and CFO positions has increased after the pandemic's onset, while internal promotions from COO and president roles accounted for 50% of new CEOs.

  Examples of CFOs assuming COO titles include Amrita Ahuja at Block and Adrian Mitchell at Macy’s, and Michael Fiddelke, CFO of Target, was recently named COO, potentially positioning them as future CEO candidates.

  In other CFO moves, Olivier Leonetti was appointed EVP and CFO at Eaton, replacing Thomas B. Okray, while Julie Andrews took on the CFO role at Orthofix Medical Inc. Meanwhile, SP Global Market Intelligence reported a decline in global IPO launches in Q4 2023, reaching the lowest annual number since 2019, reflecting a cooling market environment.

  Additionally, a separate report by Phil Wahba examines how Fortune 500 companies are increasingly eliminating the chief marketing officer (CMO) role due to its diminishing influence within the C-suite, with fewer CEOs having marketing backgrounds compared to those with finance or operations experience. Lastly, Jennifer Moss and Jen Fisher emphasize in a new Fortune opinion piece that fostering hope in the workplace can have significant benefits for employee well-being and organizational success, urging leaders to prioritize rebuilding trust and hope in their strategic agendas.

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