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What you need to know before moving from CFO to CEO

As more CFOs aim for the top job, expert Susie Clements of executive search firm Heidrick & Struggles, discusses what CFOs need to know about making the move up

Susie Clements, Regional Managing Partner of the Financial Officers Practice at Heidrick & Struggles, discusses what CFOs need to move into a CEO role and what can be expected


1. What are the key role changes CFOs can expect from a move to CEO?

CFOs will already be responsible, as the business partner to a CEO, for co-authoring the strategy of a group, for driving financial and operational performance and results, and for leading a significant proportion of both internal and external communication.

Some will also have had direct responsibility for additional functional management outside of finance, typically being HR, IT, and Administration.

They are unlikely, however, to have had direct management of the more operational areas of a business such as Marketing, Sales, Operations, or Logistics and will, therefore, need to adjust to the line management of, as opposed to the influencing of, these areas.

The exception to this rule are the increasing number of CFOs who have already had operational experience as a divisional or regional CEO; a good example of which would be Nick Read, CFO at Vodafone Plc.

This said, the bias of the feedback that we receive from those who have made this move references the key difference as being the ‘loneliness’ of the CEO role.

As a CFO they will not have been the most senior executive and the person who must answer to the board, shareholders, employees and other interested parties regarding any decision or action taken in the management of an organisation.

As a CEO, in contrast, the buck stops firmly at their door, regardless of how close-knit and collaborative the senior leadership of the organisation may be.


2. What makes a good CEO? What characteristics in a CFO are suited to a move to CEO?

Vision. A growth mindset. Energy and vitality. A robust personality and exceptional presentation and communication skills. The ability to lead with conviction through a VUCA world and the ability to get things done. Ideally this all comes in an onion skin of clear intelligence and a high EQ.

A strong, commercial and strategic CFO should have many, if not all, of these traits already. Additionally, they will bring particular strength in their ability to apply critical thinking and logic to a situation, rooted as they have been in their careers to date in the interpretation of what the numbers actually mean.

Their ability to understand the health of a business through the interrogation of underlying performance metrics allows a CFO-turned-CEO to be clear sighted when setting and driving the group’s optimal strategy, core KPIs and behaviors required to achieve success.

Not all, however many, CFOs also come with more exposure to running large corporate projects, such as M&A deals or ERP implementations, so will be bring agility and the experience of leading change.

Given today’s new norm of political and commercial uncertainty, if they have also gained a professional qualification such as an ACA, CIMA or an MBA, as many have, the quality stamp afforded by such training affords a Chairman a degree of comfort when making the CEO appointment.


3. How has the shift in the CFO role from finance-based to strategic leader contributed to CFOs being appointed as CEOs

It has contributed greatly. The CFO role is now a platform for an executive to hone and to demonstrate their strategic leadership capabilities, both functionally and across an entire organisation.

In many cases, they will deputise for the CEO as the chair of committees, business reviews or sometimes even board meetings, where the CEO is unable to attend.

These broader interactions with the board, investors and the business naturally raises their profile as someone who can be a commercial and strategic operator, as well as functionally adept, and therefore positions them nicely as a potential CEO successor.


4. For those CFOs who do not want to make the move to CEO, what’s the next step on the career ladder?

They may move organisations, for the challenge incumbent in operating in a new environment, or for a specific challenge, such as a corporate turnaround, managing a high growth environment, or an exit event such as an IPO.

Alternatively, they could move to a plural career, taking up Non Executive Directorships; in particular, they are highly suited to Audit and Remuneration Committee roles.


 5. Do you expect to see a rise in the number of women CFOs and CEOs in the next five years? How can we see an increase of women in the top roles?

Yes; there is a focus on hiring and developing female finance executives in most organisations with whom we interact today.

The challenge lies in the restricted existence of proven Plc CFO talent and so many organisations are focused on hiring females into key CFO-report roles with the intent to develop those individuals as internal succession options for the CFO seat.

A good example of this is Carole Cran, who was promoted into the CFO role at Aggreko Plc in 2014.


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