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Essay Available:
Pages:
2 pages/≈550 words
Sources:
3 Sources
Style:
APA
Subject:
Business & Marketing
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
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Topic:

The Role of the Financial Manager: How a CFO can graduate to CEO?

Essay Instructions:

combination of the two that plays a role in affecting the market price of the shares and shareholders value. The individuals who must have an eye on this are usually the CEO and the CFO.

Please read the articles below, which are both available in Proquest. You need to click ‘ADDIONAL LIBRARY RESOURCES’ under the title of Online Library in the TLC Portal in order to access the links.

How a CFO can graduate to CEO

Corporate Finance; London; Jun 1999; Janine Brewis

Abstract: Positions of power within corporates are highly sought after, and today's chief financial officers and finance directors are increasingly becoming aware that they now have a realistic opportunity of becoming CEO. Part of the reason for the trend towards recruiting CFOs who can behave as strategic partners is that the investor community looks much more critically at the business performance and management strengths and weaknesses of corporates. This strategic positioning gives them an opportunity to buff up their image, and make themselves seen as a more credible candidate to take over the CEO role.

Do CFOs Really Make Good CEOs

Institutional Investor; New York; Aug 1989; Picker, Ida

Abstract: With the proliferation of corporate takeovers, leveraged buyouts, and restructuring in the US, it would seem that chief financial officers (CFO) hold the keys to executive wisdom. Recruiters report a growing trend of grooming CFOs for chief executive officer (CEO) positions, with some estimating that nearly 25% of top corporate leaders are former CFOs. Analysts, academics, and headhunters agree that the ideal CEO communicates well, is adept at managing managers, understands the company's product and operations, and provides a consistent vision. A recent survey by Management Practices Quarterly reveals that, of 83 new CEOs appointed in 1988, more than 18% came from operations-production backgrounds, some 23% had technical training, while only 14.4% had a financial background. D. Wayne Calloway, who became CEO of PepsiCo in May 1986, was formerly the company's CFO and is probably the best example of the valuable experience CFOs can bring to the CEO position.

Assignment Expectations

Read the two articles above, look for newer articles on the subject by browsing the web and then write a two-page paper answering the following question:

Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?

Include a discussion of both the pros and cons of hiring a CFO to be CEO. Try to cite at least three articles in your paper in support of your arguments in favor of and against hiring a CFO to be a CEO. Remember to include a reference list and to refer to the articles you use in the body of your paper.

Essay Sample Content Preview:

Role of the Financial Manager
Student’s Name
Institution
Role of the Financial Manager
As the organization’s highest ranking executive, the CEO carries out significant duties that determine the company’s direction. Some of these duties include decision making, culture cultivation, community and public relations, delivering performance, and oversee overall operations of the company. As such, the position requires an all-rounded person. According to Brewis (1999), the role of CFOs in organizations is evolving, and they are now expected to perform a larger set of responsibilities. As informed by the author, CFOs are now required to interact with the management boards and also make contributions towards strategic planning. Do these increased roles of CFOs make them suitable to take over as CEOs of organizations?
It is obvious that the primary roles of a CFO do not qualify one to become a good CEO. According to Kowalski & Campbell (2000), for financial managers to distinguish themselves in their companies, it is essential that they show leadership abilities. They need to cultivate entrepreneurship and communication skills. The vast responsibilities that come with being a company’s CEO require an individual with a number of skills. Therefore, for a CFO to make a good CEO, it is critical that they take the time to learn other important skills that are essential for leading an organization. Although their roles in the organization may have increased in the recent past, it still does not qualify them to be CEOs since they still revolve around numbers. While many CEOs have a financial background, they do not get there directly from being the CFO. They have to gain operational experience first.
According to research by Korn Ferry Institute (2015), only 13% of CEOs moved to the position from being CFOs. In addition, only 18% of the CEOs hel...
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