Only 5% of CFOs are promoted to CEO
It remains the dream of many budding finance professionals. Join a corporate finance department. Become treasurer, become CFO and then, finally, make it to the post of CEO. But according to research from the Corporate Executive Board, a Washington-based corporate institute, a mere 5% of CFOs are able to make the leap. Eisha Tierney Armstrong, a research practice manager for the CFO Executive Board (a division of the Corporate Executive Board) puts relationship management at the head of any CFO's priorities, as well as the creation of a succession plan.
?Operational knowledge improves how helpful CFOs can be to their general managers,? she says, which in turn will improve the chances of making that vital promotion. ?Internally hired CFOs perform better than externally hired CFOs,? she adds.
The report also shows that CFO turnover averaged 17% between 1995 and 2003. The figure peaked in 2000 and has been falling ever since.
Armstrong comments: ?Poor corporate performance is driving CFO turnover. In the past eight years we found that the largest driver was negative stock price performance when compared to the industry average.?