Dive Brief:
- Roughly one quarter of CEOs surveyed (26%) ranked CFOs as the top job security risk within their own C-suites, followed closely by 24% who saw chief operations officers as a threat and chief commercial officers (20%), according to Boston Consulting Group’s CEO Insomnia Index report released Wednesday.
- The perceived vulnerability may arise from the CFO’s ongoing relationship with board members; finance chiefs regularly brief the board on financial performance, forecasts and capital performance and that role can position them as the CEO’s “natural heir apparent,” the report states.
- “While having a strong successor should be a part of every CEO’s legacy plan, it’s only human to feel exposed when a replacement is waiting in your own C-suite, especially during times of heightened volatility or disappointing results,” according to the BCG’s report.
Dive Insight:
The CEO replacement anxiety may in part be fueled by recent trends they’re noticing. CFO to CEO promotions reached their highest level in a decade last year, with more than 10% of sitting CEOs coming directly from a top finance seat, compared to about 7% in 2024 according to Crist Kolder Associates’ latest Volatility Report.
For example, in February Japanese automaker Toyota promoted CFO Kenta Kon to succeed Koji Sato, and last year Unilever abruptly tapped its CFO Fernando Fernandez to take over as CEO.
One way to alleviate the strain that these concerns can cause is for the CEO and CFO to clarify their responsibilities. Gregory Rice, a BCG partner and director, recommends that the pair can bolster a true partnership by clearly apportioning their duties and responsibilities.
“When both sign on to the value creation strategy with the board, if there’s a shortfall, it doesn’t land exclusively in the CEO’s lap,” Rice said in the report.
In contrast, the report found that AI is not yet a “primary source of day-to-day pressure for many CEOs,” with a large majority (84%) of the CEOs surveyed reported feeling more energized than stressed by the need to innovate. Jessica Apotheker, BCG’s global chief marketing officer and CMO of the firm’s tech build and design division, said the fact that technology ranks only ninth out of 11 top stressors wasn’t surprising.
“AI pulls CEOs out of the daily performance grind by giving them the opportunity to learn something new, and to become a visionary who makes a meaningful impact on the trajectory of their company,” Apotheker said in the report.
BCG’s index and report draws from a survey of about 500 CEOs from companies with $100 million or more in revenue which was conducted from Jan. 7 to Jan. 21 as well as five years of CEO turnover data from the S&P 1200.
