Hiring A CFO To Be A CEO Essays Example

A chief finance officer is a potential candidate to hire or promote to the position of a chief executive officer. The officer’s leadership and management skills are vital in ensuring the success of a business. However, there are possible drawbacks to such a decision. The job descriptions are not the same for the two positions because while the function of the CEO is to give direction to the company, a CFO has more focused duty of dealing with financial issues (Hilger, Ansgar and Utz 20).
Vodafone Limited, a publicly traded company, has its CEO for the Africa region, Nick Read, who was one time the company’s CFO. Another example of a company that has promoted its CFO to serve as the CEO is Pepsi Co. where Indra Nooyi is the current CEO. The two officers had a finance background, and they are running their positions successfully, therefore, finance departments can be used to train CEOs.
The advantage of hiring a CFO from the same organization to be the CEO is his good knowledge of the company’s financial status. This makes the officer be in a better position to implement the financial recommendations of the company (Barclift 611). A CEO is trusted with steering the organization towards profitable ventures and thus a CFO, having worked in the department that deals with financial position of the company may work better in the position of a CEO.
The company may not benefit much from having a CEO, who was previously a CFO because the CFO may have a narrow perspective of looking at the business from his previous experience. The officer may, therefore, miss the big picture of the company thus affecting its business growth (Clifford and Jay). In addition the officer, who may have specialized in accounting and finance background, may miss out on the importance of other aspects of business such as marketing.

Works Cited

Barclift, Z. Jill. "Corporate governance and CEO dominance." Washburn Law Journal 50 (2011): 611.
Clifford, Trish Gorman, and Jay Barney. "Play It Safe or Take a Stand?." harvard business review (2010): 13-69.
Hilger, Stefan, Ansgar Richter, and Utz Schäffer. "Hanging together, together hung? Career implications of interpersonal ties between CEOs and top managers." BuR-Business Research 6.1 (2013): 8-32.