Over the past decade, more CFOs have moved into CEO roles as the position evolves to include greater strategic and leadership responsibilities. This trend reflects a growing demand for executives who can navigate economic volatility with financial discipline.
In the first half of 2024, 7.1% of CEOs at Fortune 500 and S&P 500 companies came from a CFO role, up from 5.3% in 2013.
But while many Fortune 500 CEOs have finance backgrounds, the transition is not always seamless because the CFO skill set does not always align with the leadership, vision, and risk tolerance required to be an effective CEO.
“Historically, CFOs are counted on to be black and white and by the numbers, when in reality, a CEO is the one that has to navigate through the gray,” says Jeff Herzog, president of executive recruitment firm FPC National. Successful CEOs are able to thrive in ambiguity—an ability that often comes more naturally to those with broad, cross-functional experience rather than a narrow financial focus.
Hardik Sheth, who leads BCG’s Center for CFO Excellence in North America, warns that a CFO’s financial discipline can become a liability in a CEO role. An over-reliance on numbers and quantitative thinking can create blind spots in areas like vision, talent, and company culture.
Joanna Starek, chief commercial officer at leadership consultancy RHR International, echoes this concern, noting that many CFOs assume they are ready for the top role simply because they have worked closely with the CEO.
“I’ve seen a lot of CFOs overestimate their readiness,” says Starek. “They sit so close to the CEO that they feel like they know what they need to do to drive the success of the company, but they haven’t necessarily shouldered the burden of growth as well.”
Watching and learning from the CEO isn’t enough. Those who successfully transition from finance chiefs to the corner office have already taken on strategy, P&L management, and operational responsibilities while honing strong interpersonal skills. CFOs who fail to cultivate a well-rounded business background and effective communication skills earlier in their career often struggle to broaden their expertise retroactively.
Kathy Pattillo, managing partner at Boyden, emphasizes that soft skills—like being an attentive listener and having an engaging personality—are among the most critical traits of CFOs who thrive as CEOs.
“There are a lot of financial leaders that just plain don’t have that personality, and you can’t go to school and learn it.”
The role of the CFO as a cost-cutter rather than a growth driver also presents challenges for those stepping into the CEO position. In fact, CFOs-turned-CEOs are, on average, slower to drive top-line growth compared to those from other backgrounds. Research from Spencer Stuart found that only 8% of CFOs-turned-CEOs lead their companies to top-quartile performance, whereas “leapfrog” CEOs—those promoted from two or more levels down—and divisional CEOs have significantly higher odds of outperforming.
CFOs often have an analytical, risk-averse mindset, which is an asset for a finance chief but can be a hindrance in the CEO role. “It is not just about managing numbers. CEOs need to make quick, forward-thinking choices that impact the company’s growth in the long-term,” says Çağrı Alkaya, global chair of the board at Stanton Chase. CFOs who struggle to break away from risk minimization may find it difficult to succeed in the corner office.
Admittedly, industry and company-specific needs also shape how well a CFO succeeds as CEO. CFOs-turned-CEOs are most common in financial, energy, consumer, and services industries, where businesses are heavily numbers-driven. However, in industries where innovation and risk-taking are essential, namely technology and healthcare, this career path is less common.
Intel’s former CFO-turned-CEO Bob Swan exemplifies these challenges. While praised for his financial expertise, he struggled to drive innovation and respond to market shifts at the tech company, ultimately leading to Intel’s declining performance.
Of course, no single factor determines whether a CFO will succeed or fail as CEO. Still, without a deep understanding of business functions beyond finance, CFOs-turned-CEOs risk critical knowledge gaps that could limit their effectiveness.
