Good morning! Fortune writer Lily Mae Lazarus here, filling in for Ruth.
CFOs are often seen as strong contenders for the CEO position thanks to their deep financial chops, visibility with company boards and shareholders, and overall familiarity with the organization’s inner workings. But these strengths alone are just a small part of what it takes to excel in the top role.
Despite the growing trend of CFOs becoming CEOs, not all finance chiefs are suited for it. Research from Spencer Stuart found that, on average, CFOs-turned-CEOs are slower to drive top-line growth compared to leaders from other backgrounds. That’s largely because the CFO archetype doesn’t always align with the leadership, vision, and risk tolerance essential for a successful CEO.
Notably, the study also found that “leapfrog” CEOs—those promoted from two or more levels down—and divisional CEOs have significantly higher odds of outperforming.
“Historically, CFOs are counted on to be black and white and by the numbers, when in reality, a CEO is the one that has to navigate through the gray,” says Jeff Herzog, president of executive recruitment firm FPC National.
Thriving in ambiguity, he explains, often comes more naturally to those with broad, cross-functional experience rather than a narrow financial focus, which can lead to an over-reliance on numbers and quantitative thinking—creating blind spots in areas like vision, talent, and company culture.
CFOs who do go on to have successful stints in the corner office have a more comprehensive and well-rounded background and typically have already taken on strategy, P&L management, and operational responsibilities while developing strong interpersonal skills.
Of course, no single factor determines whether a finance chief will thrive or falter as CEO. But those lacking a diverse and expansive understanding of business functions—along with the ability to inspire and lead through uncertainty—risk falling short in the role.
Read the full story here.
Lily Mae Lazarus
lily.lazarus@fortune.com
Today’s issue was edited by Ruth Umoh.
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Leadership lesson
“Confidence comes from knowing that all success doesn’t come from me alone. I don’t walk into situations and say I am capable of doing anything. I know what I’m good at and what I’m not.” — Ursula Burns, former CEO of Xerox
News to Know
President Trump said he is personally monitoring Elon Musk’s potential conflicts of interest but acknowledged he was unsure whether Musk met India’s Prime Minister as a private citizen or a government representative. Fortune
JPMorgan Chase CEO Jamie Dimon expressed skepticism about unconscious bias training, suggesting he may cancel some DEI programs due to excessive spending. Fortune
Chevron, the second-largest U.S. oil and gas company, will lay off as much as 20% of its workforce. CNBC
President Trump has adopted a more aggressive trade policy in his second term, proposing sweeping tariffs on over $1.3 trillion. NYT
The CEOs of GM and Ford Motor are trying to mitigate the impact of the Trump administration’s policies by engaging with lobbyists, trade groups, and Republican Congress members from key auto industry states. Bloomberg
