The role of the Chief Financial Officer (CFO) is undergoing a transformation. Once seen primarily as number-crunchers and risk mitigators, today’s CFOs are strategic architects, digital adopters, and corporate visionaries. They are influencing everything from operations to corporate responsibility. Increasingly, CFOs are stepping into the CEO role.
This shift isn’t just anecdotal—the numbers tell a clear story. According to research from Heidrick & Struggles, one-third of FTSE 100 CEOs previously held CFO positions, up from just 21% in 2019. Similarly, in the U.S., 8.4% of Fortune 500 and S&P 500 CEO vacancies in 2023 were filled by CFOs—the highest percentage since 2013. Why is this happening—and why now?
Why CFOs Are Rising
Companies today face volatility unlike ever before. Uncertain financial markets, supply chain disruptions, political instability, and increased regulatory scrutiny require leaders who can think critically, act decisively, and manage risk. CFOs check all those boxes.
Beyond financial oversight, today’s CFOs are driving corporate strategy, digital transformation, and even sustainability initiatives. ESG (Environmental, Social, and Governance) reporting, once the domain of legal teams and marketing departments, is increasingly landing on the CFO’s desk. With their deep understanding of financial risk and regulatory compliance, finance leaders are uniquely positioned to integrate ESG goals into broader business strategy.
The Evolution of the CFO: From Guardian to Growth Driver
Traditionally, CFOs were seen as the financial stewards of a company, guaranteeing compliance, controlling costs, and managing risk. That’s no longer enough. Today, they must also be business drivers. They analyze data in real time, make strategic investment decisions, and shape company-wide innovation.
Take technology. CFOs are leading the charge in digital transformation. AI, automation, and advanced analytics are changing how businesses operate, and CFOs must decide where to invest and how to integrate these technologies for maximum return. A finance leader who can leverage data effectively can not only drive efficiency but also identify new revenue streams and market opportunities.
From CFO to CEO: The Challenges of Transition
Despite their financial expertise, CFOs who step into the CEO role face challenges. CEOs must oversee all aspects of a company, from HR and operations to sales and product development. They need to drive top-line growth, not just manage the bottom line.
Data suggests that while CFOs-turned-CEOs often excel at profitability, they can lag in revenue expansion. A 2023 study found that only 8% of CFOs who transitioned to CEO led their companies to top-quartile growth. In contrast, divisional CEOs and those promoted from lower leadership levels had higher odds of outperforming.
Why? Because CFOs must shift their mindset from cost-cutting and efficiency to aggressive growth strategies. They must embrace innovation, risk-taking, and market expansion—areas they may not have prioritized in their previous roles.
Lessons From CFOs Who Became CEOs
Some of the most successful CFO-turned-CEOs have embraced this shift with open arms. Consider these examples:
- Indra Nooyi (PepsiCo). As CFO, she led major acquisitions before transitioning to CEO. Her strategic investments transformed PepsiCo, driving revenue growth.
- Margherita Della Valle (Vodafone). A former CFO who became CEO, she focused on operational excellence while aggressively pushing for market expansion.
- Brian Moynihan (Bank of America). His deep financial acumen helped steer the bank out of crisis. His strategic vision as CEO enabled long-term success.
These leaders recognized that while financial expertise is vitally important, successful CEOs must also be visionaries, storytellers, and motivators.
How CFOs Can Prepare for the CEO Role
For finance leaders aiming for the top spot, preparation is key. Here’s how they can strengthen their CEO candidacy:
- Develop a growth mindset. Prioritize innovation and market expansion. Get involved in product development and sales strategy.
- Enhance leadership skills. CFOs must inspire teams, communicate a compelling vision, and drive cultural transformation.
- Broaden business exposure. Work closely with HR, marketing, and operations to understand the full scope of a business.
- Embrace risk. CEOs must take calculated risks to drive business growth. CFOs should practice making bold decisions beyond financial matters.
- Strengthen storytelling. Numbers alone won’t inspire employees and investors. Future CEOs must craft and communicate a compelling company narrative.
The Future of Financial Leadership Is Here
As businesses become more complex and financially driven, the trend of CFOs stepping into CEO roles will likely continue. But success requires more than financial expertise. Future CEOs must be dynamic leaders who embrace innovation and take strategic risks. They must inspire those around them.
For ambitious CFOs, the pathway is clear. Those who master the art of leadership, growth strategy, and innovation will find themselves in the corner office sooner rather than later.
