Good morning.
Applying for a CFO job isn’t what it used to be. Big companies are now looking for finance chiefs who can potentially lead the organization.
“CEO succession is an important part of our client work and it is often a criterion when recruiting CFOs,” says Jaimee Eddington, regional leader of the Americas at Heidrick & Struggles, an executive search and leadership consulting firm. “Last year, our research found that 17% of North American CEOs previously held the role of CFO. This is also true of newly appointed board directors, where, among Fortune 500 companies in 2022, 18% had previous CFO experience, an increase from 14% the year prior.”
Clem Johnson, president of Crist Kolder Associates, an executive search firm, is also finding that it’s “more commonplace that CFO searches have an undercurrent of ‘CFO-plus’ with the ‘plus’ often hinging on CEO succession potential,” he says. “Given the extent to which the CFO role has elevated in strategic importance and expanded in scope, in many organizations, this person is the natural No.2.”
“Generally, we see data-centric business models as natural environments" where there can be a "shift from the finance realm" to a CFO then leading the organization, Johnson says. "Think financial services, telecom, and B2B technology," he says.
Verizon, a major telecom company, is currently searching for a new CFO. The company is seeking a finance chief who could later transition to become a candidate for the next chief executive, according to the Wall Street Journal.
Johnson says the airline industry, which is consumer-centric and has high-transaction volumes, is another example. Delta Air Lines CEO Ed Bastian was previously CFO of the company, he says.
According to research by Crist Kolder Associates, in 2022, out of 679 S&P 500 and Fortune 500 companies, the percentage of CEOs coming from the CFO chair was 7.9%, the same percentage in 2021, but up from 6.6% in 2020.
Are CFOs consistently seeking the chief executive chair? “Often top financial officer talent is looking for broader roles than the CFO seat—CFO/COO or CFO-plus roles or roles that would position them for CEO,” Eddington says.
“We absolutely see a spike in the number of finance executives who will not contemplate making a move unless there is a CEO succession element to the opportunity,” Johnson says. They’ll tell him: “‘Why would I take the same role elsewhere unless my remit was dramatically expanded?'” he says.
Sheryl Estrada
sheryl.estrada@fortune.com
