As recent high-profile CFO-to-CEO promotions show, the move from finance chief to the top job is becoming a more regular feature of the corporate world. However, a new McKinsey study warns that there’s still some resistance. The management consultancy polled investors, board members and managers—CFOs and CEOs among them—about whether finance chiefs make good chief executives.
“For every respondent who believed strongly that CFOs make good CEOs, another vehemently opposed the idea,” the report found. Reasons for negative responses included lack of motivational skills and rampant control freakery among CFOs.
In spite of the doubts, CFOs are reaching the top more often. A fifth of CEOs of large UK and US public companies were once CFOs. In continental Europe, the number is between only 5% and 10%, but that’s on the rise. CFO elevations often come at times of financial upheaval—71% of FTSE 250 companies that promoted CFOs were going through an acquisition or divestiture. The CFO was also often a compromise choice. “Appointing the CFO … was less likely to upset the division heads than would promoting one of their number above all the rest,” according to the McKinsey study. Suzzane Wood, who leads the CFO practice in London at headhunter Heidrick & Struggles, says turning a CFO into a CEO is still “a big ask.” In any case, she estimates only three out of ten CFOs even want the job.
McKinsey solicits advice from one recent CFO-to-CEO riser, José Luis Durán of French retailer Carrefour. “I needed to show that I was a regular guy,” Durán says. Then, “you must delegate to the people around you. If you don’t feel that the right person is around you, it’s better to change the person rather than toughing it out or doing it yourself.” In other words, less control freak, more power-broker.