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.

 

Chief Executive Officer

 

Name of student

Course title’

Tutors name

Date

 

Chief Executive Officer

A Chief Executive Officer takes care of all operations and performance in an organization. The CEO leads the organization, acts as the link within the organization and between the directors. As a leader the CEO maintains the corporate policies together with implementing set plans as per the organizations standards and codes. Major decisions in the organization are made by the CEO as he controls the company’s resources. The CEO is responsible for the organization success and failure. He ensures that the organization operates with consideration to the different needs of associated constituencies (Agrawal 2013)

Training the CEO in the finance department can be considered a wise move through CFO promotions.  The promotion is made possible because the CEO duties relate to the organizations financial aspects. A chief Financial Officer carries out the duties of managing financial functions of an organization. The CFO ensures that the cash flow in the organization is well monitored and distributed to the right department through approved channels. He plans matters concerning finance in regard to achieving the organization’s goals. Financial strengths and weakness of an organization are analyzed by the CFO. He proposes alternatives and corrective measures to improve the financial weaknesses thus promoting productivity. The CFO oversees all operations in the accounting and financial departments by enhancing accuracy of financial reports and their timely presentation.

The financial department usually determines of the organization performance. CEO being trained in the department gives them the ability to lead as they are acquitted with activities related to finances. The CEO can identify issues leading to organization failures because they have encounter them in the finance department. From carrying out financial analyses in the financial department the CEO stands a better chance of making the right decisions. CEO are offered valuable knowledge about the financial department while working there as CFO. Financial leadership is absorbed from the department which translates to efficient management of the organization by the trained CEO (Kim 2011)

Pros 

Promoting the Chief Financial Officer is beneficial because of the diverse knowledge the CFO has on finance. The CFO is equipped with knowledge concerning cost effective ways that improve the organization productivity. They make realistic and reasonable decisions in terms of activities that contribute to the organization growth and do away with those that do not. A CFO is always familiar with the board of directors and other executive members due to his or her involvement in organizations meetings. The CFO is always aware of the organization’s financial status and can provide standard recommendations (Geiger 2006)

Cons

The CFO has a likely hood of giving a major focus on the financial department only. This is a limitation because he might neglect other departments in the organization. He might lack ability to lead a large workforce together with poor communication skills.

Christopher Swift was the CFO at Hartford Financial Serve Group since 1st March 2010. He was later promoted to become the company’s CEO on 1st July 2014 after Liam McGee stepped down due to a medical surgery. Swift is a Certified Public Account and is a holder of bachelor’s degree in accounting that he attained from Marquette University. 

The current CEO of Siemens AG Joe Kaeser was appointed to the position in August 2013. He was the company’s former CFO from May 2006 taking up leadership in the financial department. He has formerly held various roles in the organization’s operations since 1980 when he joined the company. Joe does not have a CPA or CFA but has BA from the Regensburg University

 

References

Agrawal, A., Goldie, J., & Huyett, B. (2013). Today’s CFO: which profile best suits your company. McKinsey Quarterly, 1-6.

Geiger, M. A., & North, D. S. (2006). Does hiring a new CFO change things? An investigation of changes in discretionary accruals. The Accounting Review, 81(4), 781-809. /

Geiger, M. A., & Taylor III, P. L. (2003). CEO and CFO certifications of financial information. Accounting Horizons, 17(4), 357-368.

    Kim, J. B., Li, Y., & Zhang, L. (2011). CFOs versus CEOs: Equity incentives and crashes. Journal of Financial Economics, 101(3), 713-730.