The recent resignation of Miramax CEO Mike Lang is the latest in a string of sudden CEO departures that led to companies promoting their CFO to fill in on a temporary basis. This is a common practice among companies that do not have an executive succession plan in place.
Arguably, the most recent high-profile instance of a CFO stepping in as CEO occurred last September when Yahoo unceremoniously fired CEO Carol Bartz over the phone. Yahoo’s corporate board then promoted CFO Tim Morse to interim CEO and provided him with an “executive leadership council” to assist in the day-to-day operations of the company.
The long-term vision that CFOs must employ is a trait that ultimately helps those financial officers who are promoted to CEO, but they may lack the requisite knowledge of business operations to be successful for an extended period of time. With this in mind, it may not be surprising that studies have shown only 20 percent of current U.S. CEOs previously served as CFOs.
Still, on an interim basis, many CFOs have the skill sets to fill the corner office role and restore stability where it may have been lacking, but in general, directors of operation, vice presidents and COOs are best equipped to handle long-term CEO responsibilities. Even if former CFOs are passed by when professional recruiters conduct a formal CEO search, their future prospects are still bright.
Those seeking CFO jobs may need to be prepared to step in to serve a company as CEO if necessary. Meanwhile, companies searching for great CEOs may request the assistance of a corporate recruiter that is aware of the unique traits and experience needed to provide a business with rigorous and effective C-level leadership.