Making the Transition from CFO to CEONovember 2014

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A Market Perspective

• Demands are growing and deadlines are shrinking• Heightened market activity requires extra attention• Increased regulation means more detailed audit documentation and ridiculous filing deadlines• Spending enough time with direct reports and creating the right team beneath the CFO is

becoming more of a challenge• Increased need to operate at both macro and micro levels• Delivering strategy is about driving financial performance - need for more analytical firepower• Being robust and independently-minded often means finding yourself between a rock and a hard

place

3

Increasingly, CFO’s face a Tsunami of information needs

4

A perfect team?

5

The Key Challenges CFOs face

%0 10 20 30 40 50

Balance sheet management expectations

Compliance and risk management expectations

Finance function service delivery expectations

Expectations to play aleadership role in the company

Others

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Everyone wants a piece of the CFO

Other C-suite executives

Chief Strategy Officer

Heads of divisions

Chief Operating Officer

Chief Financial Officer

Outside of the CEO, which other executives should board members form relationships?

Other board members

Executive Vice Presidents

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Where CFOs Spend Time with the Board

Regularly Scheduled Financial Updates71%

Strategic Discussion 13%

Responding to Ad Hoc Requests 6%

As Board Member 10%

What is the Main Purpose of Your Time with the Board?

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There is an Increasing Conflict Between Where CFOs Want to Spend Their Time and the Actuality

Top People Priorities for CFOs

Direct Reports CEO Functional Heads GMs

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Today’s CFO is Expected (and Aspires) to be a Leader

• 'More than half of European finance chiefs want their next career move to be the step up to CEO'

• 'A finance/accounting background is still the most frequent route to the top in the UK. In 2006, 38% of CEOs had a finance/accounting background - 45% of those CEOs appointed internally'

• 'The best and brightest finance executives, especially those with leadership potential, will not be content to spend their career in a transaction-processing factory'

• 'Without time spent on development by CFOs, there is no way finance and leadership can ever be synonymous'

• 'The goals associated with CFO Leadership Development are very common across industry and for small or large global enterprises - however the approach to reaching those goals varies dramatically'

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Do You Want to be a CEO?

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CFO & CEO Competencies

Finance expertise Structured approach to

people management Less empathetic

management tendencies Analytical decision-making

Strategic intelligence Analytical Action-focused Leadership Presentation skills Operational knowledge Understanding of

regulatory environment Integrated company-wide

Demonstrates toleranceof ambiguity and intuitive decision-making

Builds teams Visionary Demonstrates high energy

and confidence Broader responsibilities Sales and marketing

capabilities

CFOCEO

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CFO’s are Perceived as Good Candidates for the CEO Role When Financial Issues are Core to Strategy

Turnarounds or M&A growth programs71%

Business as usual29%

CFOs promoted to CEO during the following situations1

13

Most CEOs with a CFO Background were Promoted within the Same Company

36% 42%

11% 11%

Moved to CEO role within the same company

Moved to CEO role from other company

Moved to CEO role directly from CFO position

Moved to CEO role from other position

CEOs with prior experience as CFOs1

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Experience in More Than One Role and More Than One Company Broadens a CFO’s Appeal as a CEO Candidate

Experience in finance and general management from >1 company69%

Experience in finance only from >1 company 22%

Experience in finance and general management from only 1 company 9%

CFOs promoted to CEO during the following situations1

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What Does the CFO of the Future Look Like?

Market Environment Business Strategy Finance Tools

Experience Skills & Capability Attitude

Pressures and Influences

Career Implications

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Contact Details

John ColvinPrincipalE: jcolvin@johncolvin.com.auM: +61 409 183 174S: +61 2 8823 3485Level 36, Governor Phillip Tower1 Farrer Place, Sydney NSW 2000, Australia

Sandra HeinigSenior AssociateE: sh@johncolvin.com.auM: +61 416 731 897S: +61 2 8823 3485D: +61 2 8823 3487Level 36, Governor Phillip Tower1 Farrer Place, Sydney NSW 2000, Australia

Sian O’ShaughnessyResearch AnalystE: sian@johncolvin.com.auD: +61 2 8823 3485 Level 36, Governor Phillip Tower1 Farrer Place, Sydney NSW 2000, Australia