It’s not uncommon for an incumbent CFO to be appointed CEO. From a Board perspective it makes sense – they know the company, they understand the numbers, they will ensure proper control, the market sees them as a safe pair of hands.  And, as I have heard several times “replacement CFOs are easy to find, CEOs are much harder”.

For both the CFO and the company this is a real gamble, and often no-one understands how dangerous it is until it is too late for both parties.  There are lots of reasons for this but the most important one is that the two jobs require totally different skill sets and personalities and for a company to succeed they need to work in partnership.

A great CEO is there to set strategic direction, to inspire all the company’s stakeholders, to take the big strategic decisions that only they can take, and to deal with the existential risks and opportunities.  They must be people focused and fundamentally outward facing.  A great CFO needs to be a strategic thinker, trusted by investors to protect their interests, a guardian of financial probity, and a great manager of the company’s finances.  The two will not always agree.

 If the CFO is promoted into the CEO role, then, unless the company is in trouble, in which case the qualities that made them a great CFO may well be the ones needed to get back on course, the ex-CFO must change personality and that is not an easy thing to do.  They have to appoint a great CFO into their old role and then leave them alone to get on with the job – too many ex-CFOs spend much of their CEO time doing the CFOs job as well.  The new CEO has advantages, they understand how the company works, they know its strengths and weaknesses, but they now have to pivot to be a strategic thinker and inspirational leader.  They must become outward facing and embrace risk and opportunity.  Life can get very lonely at the top and some ex-CFOs find the adaptation very difficult.  With support, both of an external mentor, and of a good Chairman and Board they can make the move but there is always risk and both the new CEO and the Board need to understand that.