In an era of tight money and twitchy investors, boards keep reaching for the person who speaks fluent cash flow. Finance chiefs are moving into the top job at a clip not seen in years. In 2024, CFOs accounted for 14% of new S&P 1500 CEOs—nearly triple the prior year—and in Europe the figure touched 16% across major listed companies. The logic is obvious: a CFO already knows the business model’s plumbing, the investor base’s temperature, and the company’s risk exposures. The question that matters to shareholders is simpler, and more uncomfortable: does a CFO make a good CEO?

Recent cases illustrate why boards like the move. BP elevated its former finance chief Murray Auchincloss to steady the ship after a leadership shock, betting that credibility with markets would buy time for strategy. Vodafone made longtime CFO Margherita Della Valle permanent CEO in 2023 to prosecute a complex turnaround across assets, geographies and regulators. Both promotions signaled a preference for discipline over drama.

Boards also hire what the cycle demands. This cycle has been about balance sheets, capital discipline and the cost of capital, not blitzscaling. The modern CFO’s remit has expanded well beyond the ledger—capital allocation, strategy, risk, technology spending, even talent planning—making the jump to CEO feel less like a leap and more like a step. In 2023, CFOs filled a record share of CEO vacancies across the Fortune 500 and S&P 500, reflecting that broader scope.

Yet the performance record of CFOs-turned-CEOs is mixed—and that should give nominating committees pause. A large, multi-year analysis by Spencer Stuart found that only 8% of CFOs who became CEOs steered their companies into the top quartile of performance. Other backgrounds—divisional leaders running full P&Ls or the so-called “leapfrog” candidates—tend to produce more outperformance, likely because those executives have spent more time on customers, competition and growth.

Why the delta? Partly incentives, partly muscle memory. The CFO role optimizes for precision, risk control and investor hygiene. The CEO role requires those—and something messier: judgment under ambiguity, taste in product, an appetite for asymmetric bets. Finance leaders can excel at expanding margins and cleaning up capital structures; they can struggle when the job shifts to creating demand rather than allocating supply. Headhunters and board advisers privately describe a common arc: year one brings crisp cost actions and sharper investor communication; year two poses the harder exam—organic growth without mortgaging the future. It’s telling that some advisory work finds margin improvement under CFO-CEOs paired with comparatively slower top-line growth, a pattern boards should anticipate and design around.

None of this means finance chiefs are condemned to be caretakers rather than builders. In highly regulated or capital-intensive sectors—energy, banking, telecoms—or in turnarounds where credibility and liquidity matter most, CFOs can be exactly the right choice. Investors often reward the early phase of a CFO-CEO tenure because signals get cleaner: guidance tightens, noncore assets move, balance-sheet risks fall. The market likes a believable plan more than a brilliant one. Look back at BP’s appointment or Vodafone’s—both framed as continuity with discipline.

There’s also evidence that CFOs sit closer to the informational nerve center than most executives. Academic work on insider trading has repeatedly shown CFO trades to be more predictive of future returns than CEO trades—a proxy, however imperfect, for how tightly the finance office is wired into future fundamentals. That informational edge can translate into better capital allocation from the top job, provided it’s paired with the imagination to invest behind it.

The pitfalls are real. A finance-first mentality can skew toward earnings management over economic value. Research has linked certain equity-incentive structures for CFOs to more aggressive accounting behavior; move that mindset into the CEO seat and you risk a culture that meets the quarter while missing the decade. More prosaically, many CFOs arrive light on commercial innings: they haven’t priced a product, run a salesforce, or lived with a gross-margin target glued to their forehead. That can be learned, but not overnight.

For boards, the fix is design, not hope. If you’re elevating a CFO, pair the decision with explicit growth counterweights: give them a proven operator as president or COO; pre-commit to a pipeline of small bets in new products or geographies; hard-wire external time with customers, regulators and channel partners. Measure success not only on EPS and free cash flow but on leading indicators—win rates, NPS in priority segments, retention in the sales organization—that prevent a pure cost-takeout story from calcifying into strategy. The governance choreography matters, too. Oracle’s recent move—shifting its longtime CFO-turned-CEO to vice chair while handing the reins to two product operators—underscores that the skill mix required to monetize an AI-heavy cloud cycle differs from the skill mix needed to rebuild the numbers. Great boards adjust the job to the moment.

For CFOs eyeing the top chair, the “last mile” is clear but steep. The best candidates log real P&L time before they’re tapped, ideally in a unit with its own customers and competitive dynamics. They practice external leadership—on the road with sales, in the weeds with product, in front of skeptical regulators—until it feels native. They build a bench that complements their wiring, not copies it. And they learn to tell a story that exists beyond the spreadsheet: what the company will look like three years from now, and why customers—not just investors—will care. Playbooks from the search world reinforce those points, and they square with the numbers on who outperforms once in the job.

So, good or bad? The wrong question. The better one is “for what problem?” When the brief is to restore credibility, unstick capital, tame risk and reset incentives, a CFO can be a superb answer. When the brief is to invent the next S-curve, a CFO will succeed only if they have already rewired their game around customers and growth—and if the board builds a team to match. The rise of the finance chief to the corner office reflects the world we’re in: uncertain, capital-hungry, allergic to surprises. The companies that turn that prudence into durable advantage will be the ones that remember what prudence is for: not just to protect the downside, but to buy the shot at something bigger.