The Rise of Financial Leadership: Why More CFOs Are Becoming CEOs

For most of the last century, the finance chief was rarely the obvious heir to the chief executive’s office. The CFO kept the books, managed risk and reported the numbers; the CEO came from sales, operations or the founder’s chair. That has changed. Boards are increasingly looking at their chief financial officer as a serious candidate for the top job — and in many cases appointing them. This article looks at why the CFO-to-CEO pathway has opened up, which skills carry across and which do not, the criticisms finance leaders face in the transition, and what the trend means for how companies plan succession.

It is written for two audiences: boards and owners deciding whether their finance chief is the right next chief executive, and finance leaders weighing whether, and how, to make the move themselves. We have also added practical guidance on regulated firms, on covering the gap while a succession plays out, and on backfilling the CFO seat once it is vacated — the part of the process most companies leave too late.

How the CFO role has changed

The shift starts with the job itself. The modern CFO is no longer a back-office financial steward. Over the past two decades the role has broadened from compliance, budgeting and reporting into strategy, corporate development, technology investment and risk — the CFO now sits at the centre of most of the decisions that shape where a company is going, not just how it accounts for where it has been.

Three forces have driven that expansion. First, complexity: volatile markets, globalisation and a heavier regulatory load have made financial judgement central to almost every strategic decision. Second, data: modern finance functions own the analytics and forecasting that increasingly drive the business, giving the CFO a real-time, whole-company view few other executives have. Third, governance: CFOs have become trusted advisers to the board and central to corporate governance, which puts them in the room for the decisions that matter. The cumulative effect is that the CFO now develops exactly the strategic and cross-functional perspective the CEO role demands.

The practical upshot shows in the day-to-day remit. A typical CFO job description today covers capital structure and funding, investor relations, M&A, pricing, systems and data, and often procurement, IT or legal as well. Many CFOs also act as de facto deputy to the chief executive, chairing the investment committee and running the annual planning cycle. By the time a capable finance chief is considered for the top job, they have usually already been doing a share of it.

The traditional route to the top — and why it shifted

It helps to see how much the picture has moved. For much of the twentieth century the CEO was the founder, then — as businesses professionalised — the general manager who had risen through operations, and later the sales or marketing leader who could drive revenue and market share. Finance, for all its importance, was seen as a supporting function rather than a launchpad.

What changed is the nature of the challenges companies now face. When growth was the dominant question, commercial leaders had the edge. When the dominant questions became capital discipline, risk, resilience, technology investment and value creation under pressure — the areas a CFO lives in every day — the balance tilted. In an environment defined by economic volatility, tighter regulation, ESG expectations and relentless digital change, the financial leader’s toolkit maps unusually well onto the demands of the chief executive’s job.

The UK has always been slightly different here. Because chartered accountancy has long been a common training ground for British business leaders, a finance background at the top of UK companies is not new. As far back as 2013, a Robert Half analysis of FTSE 100 chief executives found that 52% had an accountancy or financial management background, and that 12% had moved straight from a finance role inside their company to the CEO seat. What has changed since is less the presence of finance-trained leaders than the expectation that the sitting CFO is a natural succession candidate. If you want a clear view of how the three senior roles differ before weighing a move between them, our guide to CEO vs CFO vs COO sets out the distinctions.

Why the trend has accelerated

The CFO-to-CEO move is not new, but it has become markedly more common in recent years, and the reasons are specific to the current environment rather than a general drift. After a run of economic shocks — a pandemic, an inflation spike, higher interest rates and tighter credit — boards have placed a premium on leaders who understand capital, cash and cost structure in their bones. When money is expensive and growth is harder won, financial fluency at the top stops being a nice-to-have.

The movement data points the same way. Russell Reynolds Associates’ Global CFO Turnover Index, which tracks finance chiefs at companies in indices including the FTSE 100 and S&P 500, found that of the CFOs who left their posts and took a new role in 2024, 34% became a president or CEO, up from 20% the year before, as reported by Fortune. That figure covers only departing CFOs who moved into another role, not all finance chiefs, but it shows the top job has become a realistic next step rather than an exception.

At the same time, investor scrutiny has intensified. Private equity owners, activist shareholders and public-market investors increasingly want a chief executive who can speak credibly to value creation, capital allocation and margin, not just vision. In private equity in particular, where the value-creation plan is explicit and the hold period finite, a finance-literate CEO is often exactly what the deal thesis calls for. Add the rise of ESG reporting and the data-and-technology agenda — both of which the finance function typically owns — and the modern CFO ends up holding more of the levers a CEO needs to pull than at any point in the past.

The skills that transfer — and the ones that don’t

The case for the CFO-turned-CEO rests on a set of genuinely transferable strengths:

• Strategic and financial judgement. The ability to read the numbers and translate them into direction is core to both roles.
• Risk and resilience. Finance leaders are trained to see downside and stress-test decisions — valuable in any CEO, essential in a turbulent one.
• Governance and integrity. A CFO’s grounding in transparency and accountability builds the trust a board needs in its chief executive.
• Whole-company perspective. Few roles other than the CEO see across the entire business the way a modern CFO does.
• Investor and lender credibility. A CFO who has already run results presentations, refinancings or a sale process walks into the top job with relationships and a track record the owners already trust.

But the transition is not automatic, and it is worth being honest about where finance leaders can struggle. The most common gaps — and the fair criticisms of CFO-CEOs — cluster around a few themes: limited hands-on operational experience in functions like sales, marketing and product; a habit of leading through financial metrics that can crowd out culture, customer and innovation; a natural risk-aversion that can tip into over-caution when the top job calls for bold bets; and a data-led communication style that has to widen into the ability to inspire a whole workforce. None of these is disqualifying, but each is real, and the finance leaders who make the jump well are the ones who have deliberately built operational breadth and people-leadership before they need it.

There is a subtler point too. A CFO is used to being the person who challenges the plan; a CEO has to own it, sell it and live with its failures in public. That change of seat — from critic to author — is the adjustment new CFO-CEOs most often mention, and it is hard to test for in an interview. The CEO job description is a useful prompt here: read it line by line and ask where the candidate has genuinely done each part, rather than watched it being done.

What the pattern tells us

The high-profile examples that get cited — large listed companies where a finance leader stepped up and delivered strong shareholder returns — are useful less as individual stories than for what they have in common. Where the CFO-to-CEO move succeeds, a few things tend to be true: the individual had already moved beyond a narrow finance remit into genuine strategy and corporate development; they paired financial discipline with a clear growth or transformation thesis rather than cost control alone; and they had built the cross-functional relationships and communication range to lead people, not just manage performance. Where it disappoints, the reverse is usually true — a leader who stayed in the numbers and never widened the aperture. For a board weighing an internal finance candidate, those are the traits to test for.

Where the move fits best — and where it fits less well

Context matters as much as the individual. The CFO-to-CEO move tends to suit businesses whose next chapter is financially shaped: a turnaround, a refinancing, a period of acquisitions, a sale or listing, or a capital-intensive sector where returns on investment decide the strategy. It tends to suit less well where the next chapter is mainly about product, brand or sales — a consumer business that needs to reinvent its proposition, or a technology company whose growth depends on engineering and go-to-market. In those cases a finance leader can still be the right choice, but the board should be clear about what support sits around them.

Illustrative example (not a real client): a mid-sized, PE-backed distribution business is two years from a planned exit. Its CFO has led the bolt-on acquisitions, owns the lender relationships and knows the equity story. Promoting her to CEO, with a strong commercial director alongside, is a natural fit for that brief. Put the same CFO into a business whose central problem is a failing product range, and the fit is far less obvious.

What it means for succession planning

The practical implication for businesses is that the finance function is now a credible source of future chief executives — and should be developed as one. That has consequences for how companies plan ahead:

• Broaden finance talent early. Give high-potential finance leaders cross-functional exposure — operations, commercial, product — well before they are candidates for the top job.
• Build financial literacy into leadership development. As financial judgement becomes central to the CEO role, leadership programmes should reflect it, whatever function a leader comes from.
• Widen the succession pool. Reassess succession plans so that the CFO and other finance leaders are genuinely considered, not overlooked by default in favour of commercial or operational routes.
• Test for the gaps, not just the strengths. When assessing a finance leader for a step up, probe operational breadth, risk appetite and people leadership as hard as financial capability.
• Plan the second move as well as the first. Promoting the CFO creates a vacancy in the finance chair. A succession plan that names the next CEO but not the next CFO is only half a plan.

For listed companies this is not optional housekeeping. The UK Corporate Governance Code 2024, which applies to financial years beginning on or after 1 January 2025, expects boards to keep composition, refreshment and succession under review and to explain their approach on a comply-or-explain basis. Our CEO succession planning guide covers how boards can build a pipeline that includes the finance function without defaulting to it.

For companies appointing externally, the same logic applies to the brief. A CEO search that would once have screened only for commercial or operational pedigree should now weigh financially-grounded leaders on their merits — and a rigorous executive search process is the way to assess whether a given finance leader has the operational and people-leadership range to match their financial strength. Getting that judgement right, whether the candidate comes from finance or elsewhere, is exactly the work a specialist search partner exists to do.

How boards should assess the step up

When a finance leader is in the frame for the top job — internally or as an external hire — the assessment should be deliberately balanced. It is easy to over-index on the financial and strategic strengths that are already obvious and under-test the areas where finance leaders are more likely to be untried. A sound process looks hard at operational track record: has this person actually run things — a division, a function, a P&L — or only overseen them from the finance seat? It probes appetite for calculated risk, since the top job rewards well-judged boldness more than caution. And it examines people leadership directly: the ability to set a vision, carry a workforce and communicate beyond the numbers. A finance leader who tests well on all three, on top of their financial strength, is often a stronger CEO candidate than a commercial leader with thinner financial judgement — but the point is to test, not assume. That even-handed assessment, applied to every candidate whatever their background, is the heart of a good appointment.

In practice, a few methods give boards a clearer read than interviews alone:

• Referencing beyond the finance team. Speak to sales, operations and product leaders who have worked with the candidate. They will tell you whether the CFO was a partner or a gatekeeper.
• A strategy presentation, not a financial one. Ask for a view on the next three years of the business with the finance detail stripped out. It shows whether the candidate can lead with a story rather than a spreadsheet.
• External benchmarking. Even when the board is minded to promote, comparing the internal candidate with two or three external ones protects the decision and often strengthens the internal candidate’s mandate once appointed.
• A deliberate development period. Where the CFO is the likely successor but not yet ready, give them a defined stretch — running a division, leading a major integration — with a clear review point.

Regulated firms: the extra step

In FCA- and PRA-regulated firms the CFO-to-CEO move carries a regulatory dimension. Under the Senior Managers and Certification Regime, the chief executive and the chief finance roles are separate senior management functions, and an individual needs regulatory approval for the specific function they will perform. A CFO approved in their finance role cannot simply assume the CEO function on the day of the board announcement; the firm has to apply for approval for the new function, with a statement of responsibilities that reflects the wider remit, and allow time for the regulator to assess it. The regime is currently being reformed, so firms should check current FCA and PRA guidance on approval processes before setting a timetable. Our guide to hiring an SMF1 CEO covers what the regulator looks for in a chief executive.

Covering the gap: interim and fractional options

Successions rarely line up neatly. A chief executive may leave before the chosen CFO is ready, a regulatory approval may take longer than planned, or the board may want time to run a proper external comparison. Rather than rushing the decision, many companies bridge the period. An interim CEO can hold the business steady, run the operating rhythm and give the board breathing space, while the CFO continues to develop or the search concludes. For smaller and founder-led businesses that are not ready for a full-time chief executive, a fractional CEO working a set number of days a week can provide senior direction without the full-time cost, and can mentor an internal finance leader towards the role.

The same flexibility works on the finance side. If the CFO steps up before a permanent successor is found, an interim CFO keeps reporting, cash management and lender relationships intact while the permanent search runs. That matters most in the months straight after the move, when the new CEO will be tempted to keep doing their old job as well as the new one — a habit that slows both.

Backfilling the CFO seat

Promoting a finance chief changes what the business needs from the next one. A CFO-turned-CEO will understand the finance function intimately and may have strong views on how it should be run; the new CFO needs to be capable enough to earn that CEO’s trust and independent enough to challenge them. Boards should resist the temptation to hire a pale copy of the departing CFO. Often the better appointment is someone whose strengths complement the new CEO — deeper operational finance or systems capability, for example, if the new chief executive’s background was in corporate finance and deals.

It also pays to agree the boundaries early. The new CEO should step back from the detail of the finance function, and the audit committee should be clear that the CFO reports to the board on control matters in their own right. Our guide on how to hire a CFO sets out the process from brief to offer, including how to write a brief that reflects the business you will be, not the one you were.

Advice for CFOs who want the top job

For finance leaders with CEO ambitions, the message from boards is consistent: financial excellence gets you considered, but breadth gets you appointed. Practical steps that make a difference include:

• Take operational responsibility. Volunteer for a division, an integration or a turnaround project where you own the outcome, not just the numbers.
• Get close to customers. Spend time with the sales team and key accounts. Boards notice CFOs who can talk about customers as fluently as cash.
• Build a team that could run without you. A finance function that depends on you is a reason not to promote you. A strong deputy is part of your own succession case.
• Take a non-executive role. Sitting on another company’s board shows you the CEO’s job from the other side of the table and widens your network.
• Practise communicating without numbers. Town halls, internal briefings and external speaking build the range the top job requires.

Frequently asked questions

Why are more CFOs becoming CEOs?

The CFO role has widened into strategy, data, capital allocation and investor relations, and boards facing higher interest rates, investor scrutiny and tighter regulation value those skills at the top. The CFO is often the executive with the broadest view of the business after the CEO.

Do CFOs make good CEOs?

Many do, particularly where the next phase of the business is financially shaped, such as a turnaround, acquisitions or a sale. The ones who struggle usually lack operational experience or find it hard to move from challenging the plan to owning and selling it.

What skills does a CFO need to become a CEO?

Beyond financial judgement, boards look for direct operational responsibility, commercial and customer understanding, a measured appetite for risk, and the ability to lead and communicate with a whole workforce, not just the finance team.

Should a board promote its CFO or search externally?

Both can be right. Even when the board favours the internal candidate, benchmarking them against a small external shortlist tests the decision and gives the new CEO a stronger mandate once appointed.

What happens to the finance function when the CFO is promoted?

The business needs a new CFO, often with a different profile from the one who stepped up. Many companies use an interim CFO to keep reporting and lender relationships steady while the permanent search runs.