In Europe, 21% of CEO appointments at the continent’s largest listed companies last year were previously CFOs—second only to divisional chiefs, according to data published by executive search firm Spencer Stuart. 

“Long gone are the days where we provided the numbers and asked somebody else to tell the story,” says Darren Ellis, CFO for Europe, Americas, Africa, and the Middle East at Standard Chartered. “The CFO now needs to be able to tell that story.” 

Ellis believes that there is now much more crossover between the CFO and CEO role, including setting strategy, allocating capital, steering technology investment, navigating geopolitical risk, and speaking with investors. “The CFO and CEO career paths don’t necessarily diverge anymore,” he adds. “I think they converge.” 

Mark Thumser, chief financial and strategy officer for the Americas at Japanese financial services company MUFG, says AI is accelerating this shift. As automation takes over reconciliations, reporting, and analysis, the value finance leader’s provide changes from producing numbers to interpreting them.  

“The number crunching, facts, and research, is all going to be done by models,” he says. What’s left is judgment: “Does it make sense? Is this a good risk-return trade-off? Is there a return on capital? That cannot be modeled out.” 

This is reflected in the skills sets boards now expect CFOs to exhibit. Uvashni Raman, CFO at online travel agency Booking.com, says boards want commercial, strategic, and technology skills in a future CFO.  

Nurturing CFOs into future leaders 

Companies seeking to develop CFOs into future CEOs must adapt how they identify and develop senior talent. Flatter organizational structures have reduced the number of middle-management roles where employees traditionally gained leadership experience. At the same time, AI is taking over some junior tasks that have historically helped employees develop basic financial and analytical skills. 

In response to this challenge, MUFG rotates entry-level hires through four finance functions in their first six months and is working “more intentionally” to move mid-level staff across the business. As AI takes on routine work, Thumser says, the bank is hiring for different traits. “We need critical thinking skills. We need people who’ve got some technology experience. We need people that can think about change management.” 

Ellis reviews succession plans for his senior roles twice a year, while Thumser says MUFG is planning for “the next, next CFO.”  

Despite the frequency with which CFOs are promoted to CEO, they do not necessarily excel in the role. In an analysis of 1,300 CEOs by Spencer Stuart, former CFOs were the least likely to rank in the top quartile ffor CEO performance. 

Finance chiefs are also most at risk of being replaced. Nearly 60% of the 645 CEOs surveyed by Boston Consulting Group said they planned to make changes to their senior leadership team within the next six months, with finance chiefs the most frequently cited targets.  

Raman’s advice for remaining resilient is to build experience beyond finance. “You will not be as effective a leader if you just stay within finance,” she says. Before Booking.com, she worked across operational finance, procurement, IT strategy, M&A and transformation, in several different sectors. “It was less about moving up,” she says, “and more about increasing the tools in my toolbox.” 

The CFO seat has become one of the most reliable routes to the top. But success as a chief executive depends on the breadth of experience and leadership skills finance chiefs develop before taking the job.