BearingPoint Institute study: economic uncertainty and willingness to leave employer also drive CFO-to-CEO transitions

Frankfurt / London, December 2, 2014 – A quarter (26%) of European Fortune Global 500 CFOs climbed to the top of the career ladder within the last decade. To do so, 61% of those CFOs switched to a new company; 33% even changed sector. These are the findings of a new study conducted by the BearingPoint Institute.

The study surveyed the career paths of 178 CFOs from European Fortune Global 500 companies from 2004 to 2013. When plotted against the performance of the STOXX Europe 600, the research additionally revealed that CFOs are more likely to rise to CEO during periods of economic uncertainty.

Sector experience matters, but not as much for Banking & Capital Markets

Considering the career paths of CFOs that became CEOs by 2013, it was found that some industry sectors were more open to the idea of a CEO with a financial background. Almost one quarter (22%) of the CFOs that became CEOs made the transition within Banking & Capital Markets, but the results of the BearingPoint survey also showed that the sector was open to promoting CFOs from other industries to a CEO position.

It appears that to become CEO in a Banking & Capital Markets business, expertise in the finance function can be just as helpful as specific prior experience within the sector. In general though, sector knowledge is still important when it comes to making the leap to the top. Even though they might transfer to a new employer, two thirds (67%) of CFOs were promoted to CEO within their industry.

Franz Hiller, Partner and Service Line Leader for Finance, Risk & Compliance at BearingPoint

Prominent examples of CFO-to-CEO transitions within the same sector include Ian Livingston (formerly BT Group), Joe Kaeser (Siemens), Frédéric Oudéa (Société Générale) and Kurt Bock (BASF).

Changing face of the CFO

Franz Hiller says the overall CFO-to-CEO transition rate of 26% was higher than expected, but interviews with CFOs for the report offered a reasonable explanation for this.

Historically, CFOs in Europe were often overlooked for the top job because of their largely operational role description. But changes in the internal and external business environment have raised the profile of the function. The scope of CFO responsibilities today often also encompasses regulatory affairs, the compliance realm and a company’s digitalization agenda. By setting up their finance departments to add strategic value to the organization, the role of CFO has been transformed to become a true business partner and co-pilot of the enterprise. It is only natural that they have therefore become much more likely candidates for the CEO position along the way.

Franz Hiller, Partner and Service Line Leader for Finance, Risk & Compliance at BearingPoint

About the BearingPoint Institute

Founded in 2009, the BearingPoint Institute is an incisive, authoritative voice on business-critical topics, bringing together the finest minds from both within and outside the BearingPoint organization. We strive to:

  • Advise business leaders to understand the evolution of the global economy at a deeper level
  • Explore new thinking, going beyond straightforward “Thought Leadership”
  • Propose new points of view about strategy and organizational change, and stimulate debate

This is achieved by offering practical, real-world advice from:

  • A leadership team composed of senior BearingPoint Partners, representing geographical diversity and a wealth of capabilities
  • An independent Advisory Board formed by recognized business leaders and academics
  • Studies made by experts illustrated with real-life examples
About BearingPoint

BearingPoint consultants understand that the world of business changes constantly and that the resulting complexities demand intelligent and adaptive solutions. Our clients, whether in commercial or financial industries or in government, experience real results when they work with us. We combine industry, operational and technology skills with relevant proprietary and other assets in order to tailor solutions for each client’s individual challenges. This adaptive approach is at the heart of our culture and has led to long-standing relationships with many of the world’s leading companies and organizations. Our global consulting network of 9200 people serves clients in more than 70 countries and engages with them for measurable results and long-lasting success.

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