For CFOs, the MBA trumps the CPA
MBAs have firmly established dominance over CPAs in the CFO suite.
As of August 2024, 51.42% of CFOs in Fortune 500 and S&P 500 companies hold MBA degrees, compared to just 37.63% with CPA credentials, according to a report from Crist|Kolder.
This widening gap between MBA and CPA holders among CFOs represents a change in the financial leadership landscape. The trend towards MBA-credentialed CFOs has been building over the past decade. In 2017, the gap was much narrower, with 45.80% of CFOs holding MBAs and 35.10% holding CPAs. The divergence has accelerated in recent years, reflecting the expanding purview of the CFO role.
However, the shift doesn’t spell doom for CPAs aspiring to the top finance job. While MBAs are becoming more prevalent, 13.04% of CFOs hold both MBA and CPA credentials, suggesting that a combination of broad business knowledge and deep financial expertise remains valuable.
The educational background of CFOs tells only part of the story. The path to the CFO chair is evolving in other ways as well. Perhaps most notably, external hiring of CFOs has reached a 10-year high, with 44% of new CFO appointments in 2024 coming from outside the company. This represents a significant increase from 2014, when only 40.2% of new CFOs were external hires.
Despite the increase in external hiring, the most common path to the CFO role remains through internal promotion. A striking 75% of sitting CFOs came from “number two” positions, such as divisional CFO or corporate finance executive roles. This statistic underscores the importance of gaining hands-on experience and demonstrating leadership capabilities within an organization.
The changing face of CFO credentials is mirrored by shifts in the demographic makeup of finance chiefs. Gender diversity among CFOs has nearly doubled over the past decade, with 17.8% of CFOs now being women, up from 10.6% in 2014. Similarly, ethnic and racial diversity has seen a marked increase, nearly tripling over the same period. As of 2024, 13.8% of CFOs are ethnically or racially diverse, compared to just 5.2% a decade ago.
These diversity gains are particularly noteworthy in the context of board representation. Over 75% of African American / Black executives in C-suite positions hold an external public board seat, highlighting the increasing influence of diverse leaders beyond their own organizations.
The educational backgrounds of CFOs extend beyond the MBA vs. CPA debate.
Internationally educated CFOs are becoming more common, with India and Canada being the most prominent countries of origin for those educated outside the United States. Overall, 65% of CFOs hold an advanced degree of some kind, reflecting the high level of education typically required for the role.
Internationally educated CFOs often bring unique perspectives and diverse skill sets that can be particularly valuable in global business environments. Educational systems in countries like India and Canada frequently emphasise technical skills, adaptability, and a deep understanding of both local and global markets, which can be crucial for multinational corporations. As businesses become more interconnected globally, the value of a CFO with international exposure and education increases.
This is especially important in roles that require navigating different financial regulations, tax laws, and market dynamics. A study by the World Economic Forum highlighted that CFOs with international education are better equipped to handle complex financial landscapes and are often more adept at cross-cultural communication and negotiation
As CFOs continue to expand their influence, the path from CFO to CEO remains an intriguing possibility for many. While there was a slight dip in CFO-to-CEO promotions in the first half of 2024, the overall trend over the past decade has been upward. Currently, 7.1% of CEOs came directly from the CFO role, down slightly from 8.4% in 2023 but up from 6.2% in 2014.
The dominance of MBAs over CPAs is just one indicator of a broader shift towards CFOs who can combine financial acumen with strategic thinking and leadership skills. For aspiring CFOs, the message is clear: while technical expertise remains important, it’s the ability to see the big picture and drive business strategy that will increasingly differentiate top candidates in the years to come.
As the Crist|Kolder Associates 2024 Volatility Report demonstrates, the role of the CFO continues to evolve, with changes in educational backgrounds, career paths, and diversity reshaping the profile of top financial executives in America’s largest corporations.