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.
That pipeline could slow in the face of a more positive economic environment, however, according to Craig Stevens, managing partner and advisory council chair of CEO & board services at Boyden, an international executive search and leadership consulting firm.
In the context of a typical economic cycle, when “there's more of a growth mindset, you won't see that number continue to grow,” Stevens said of the CFO-to-CEO pipeline in an interview.
Getting through the winter
Stevens began his career at Big Four firm KPMG and joined the Tarrytown, New York-based Boyden in 2018, serving as its chairman from 2021 and 2023, according to his LinkedIn profile. His past roles include a 19-year span as founder and managing partner of Cabot Consultants, as well as roles at Korn Ferry. Many of his first searches were for roles that either reported to the CFO or were for finance chief roles themselves, he said.
Over the course of his two decades in the executive search space, Stevens has identified several factors that can influence a board or company leadership to lean toward appointing a CFO to the role of CEO, he said.
“One is during the times when expense control is paramount. The other time when they need someone to go to the capital markets to raise capital, to expand the business or save the business,” Stevens said.
With companies today still facing large unknowns — including lasting uncertainty regarding the economic environment and large-scale geopolitical change — Stevens said boards and other company leaders are preparing for a “slow” season, when the focus is more on belt-tightening and steering a steady ship and less on growth. Such a point in the economic cycle is one where such leaders are more inclined to opt for the CFO as their next CEO, because “numbers are the true language of business,” he said.
“The CFO is someone they you know, they have interacted with regularly throughout other phases of the economic cycle,” Stevens said. “They know that individual well, most likely they have a high level of trust, because the CFO presents the numbers and if those numbers have had integrity over time, there's a comfort there.”
However, the percentage of CFOs turned CEOs may well taper off from its current high when the economy has steadied somewhat or moves into an upswing — when the priorities of the business, and therefore the skills that are needed at the helm, also shift.
“CFOs are stereotypically seen as the functional lead that can tighten the belt, get us through the winter,” Stevens said. “Once spring has arrived, it's about capturing market [share] and having a CEO who knows the market well, knows the customers well.”
Taking off the CFO hat
For CFOs that are stepping into the CEO seat, one of the things that’s paramount for them is “developing strong stakeholder relationships, in particular with the stakeholders that are new for them, that they didn't previously interact with,” Stevens said.
Newly-minted CEOs coming from the top finance role also need to ensure they have taken off the CFO hat, Stevens advised.
“CFOs are considered the counterbalance to the operating side of the house, and so they need to realign and really turn over the finance reins to their successor and to look broadly at their executive team without a bias toward the position they just exited,” he said.
