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The Chief Financial Officer (CFO) role has gone through a tremendous transformation. It has become more strategy focused, more value-focused and more future-focused. But Can a CFO be a CEO? While this is a great question, is this leadership transition really possible?

Chief Financial Officer

CFO has traditionally been the guardian of shareholder value and financial integrity. S/he has also been the source of financial acumen, defining the financial growth and metrics that define how the company measures success, and protecting the enterprise against value destruction.

Chief Executive Officer

The CEO's role being ultimately responsible for all day-to-day management decisions and for implementing the Company's long and short term plans. The CEO acts as a direct liaison between the Board and management of the Company and communicates to the Board on behalf of management.

What role change does it mean, the ascent from CFO to CEO?

A recent study says 62% of CFOs look forward to becoming the CEOs of organizations they are running. The CEO and CFO both deal into similar areas of strategy, stakeholder management, people management, innovation and analytics, however, the mix varies.

The CFO role has been more outward facing- managing investors, external stakeholders such as financial institutions and government entities. The transition to CEO would require considerable time towards people aspect.

Where is CFO in the race to become CEO?

CFO ranks third after COO and S&M head to claim the coveted position in C-suite. However, many of the corporate counterparts have already set examples.

The most significant is the career graph of Indra Nooyi, who joined PepsiCo in 1994, was elevated as CFO in 2001 and made the final cut as CEO in 2006.

Closer home, the country's largest IT services company Tata Consultancy named Rajesh Gopinathan as the new CEO, the earlier Chief Financial Officer (CFO) and vice-president of TCS.

New Financial Leader

Now, the CFO role is expanding to include being the company's premier champion of strategic discipline as well. S/he now co-leads the business with responsibility for multiple functions "such as a strategist, a risk manager, a data scientist while at the same time aiding with business process reengineering" as well as overseeing the traditional accounting.

Ranging from a fiduciary role (a custodian preserving value) to a visionary one (an architect creating value), the CFO today has differentiating capabilities that focus on turning data into insight and more importantly, insight into foresight.

Given the new set of responsibilities, it can be rightly assumed that CFOs are very well equipped to become CEOs.


Published by

Priyanka Gulati
Category Career   Report

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