It is true that the Chief Financial Officers (CFO) make good Chief Executive Officers (CEO) (Stuart, 2009). This can be attributed by the fact that CFOs are involved in top management of a firm and make direct interactions with the CEOs. This gives them an opportunity to learn and know some skills on what is required for a CEO such as idealistic decision making, leadership skills among others. They have a good understanding of the broad financial field of a company which places them at a better position to proceed to CEO position than other non-financial CEOs. This is triggered by their broader view of various departments within the company and their financial needs.
CFOs should be involved in the strategic planning of the company (Stuart, 2009). They should participate and contribute in the meetings to familiarize themselves with all the board members. This provides them with in-depth management skills of an organization. They have the ability to manage the company’s finances well and help it to progress forward by creating more investment opportunities when they become CEOs. Most CFOs are able to think widely apart from finance, they also do well in other areas such as production and marketing. CEOs should have good leadership skills and they are trusted with making sound decisions that keep the company competitive. This gives a better position for CFOs to become CEOs as most of them possess these skills because of their positions.
There have been several CFOs who have moved to CEO positions such as Richard Whitt and Sallie Krawcheck. Richard Whitt is now the CEO of Markel Corp, an insurance agency company in New York (Cesar, 2011). Prior to his appointment 2011, he had worked for five years in position of a CFO in the company. He is a CPA professional and has worked with other companies as an auditor before he joined Markel Corp Company. Sallie Krawcheck is the CEO of Global Wealth and Investment Bank of America from year 2008 (Women in the economy, 2012). Prior to her appointment, she was a CEO at Citi Global Wealth Management where she joined in 2002. In 2004, she was appointed to head CFO at Citi Global Wealth Management to the time she became the CEO. She holds a BA and MBA degrees. The two CEOs have worked in CFO positions before they were promoted to CEO indicating that CFO can form a good training for a CEO.
There are advantages of hiring a CFO to hold a CEO position in a company (Rakoczy, 2012). Since CFO is a member of executive team, he understands the company’s clients, employees and board members well. So, when appointed to be CEO of that company, it will continue to be competitive as it was previously since the management is almost the same. He may be able to correct some of the financial problems that may have been in existence and preventing success of the company. The main requirement of a business is to make profits. A CFO can easily lead a company to being profitable as he has broad experience in finance. On the other hand, a disadvantage of hiring a CFO for a CEO position is that he may concentrate more on the financial part where he has broad experience and forget other departments which are also very important for the success of a company.
References
Cesar, B. (2011). CFO innovation ASIA. Web.
Rakoczy, C. (2012). Pros and cons of hiring a CFO to be a CEO. Web.
Stuart, S. From CFO to CEO. 2009. Web.
Women in the economy. (2012). Wall Street Journal. Web.
