Module I: Case Assignment
FIN301: Principles of Finance
October 31, 2011
For the following Case Assignment, I will investigate if the finance departments are the best place to train future CEO’s. In addition, I will include a discussion of the pros and cons of hiring a CFO to be CEO. Also, I will provide two actual examples of CFO’s of publicly-traded companies who became CEO’s of publicly-traded companies within the past 5 years. Furthermore, I will research if those individuals have a CPA and/or CFA designations.
I. Do you think finance departments are the best place to train future CEOs? 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.
Certainly, the finance departments are not the best place to train a future CEO. The reason is that the personnel in the finance departments have an expertise of developing finance, accounting, billing and auditing procedures. Therefore, they develop a deep insight into the financial position of the company and are capable of prescribing cost control, develop plans, set up budgets, and understand compliance requirements of the law. In addition, the finance department teaches its personnel to develop and direct the implementation of strategic business, assist in getting licenses, insurance, and provide support during policy making. Also, the financial manager learns how to work in a stable environment, plan in detail, set up control systems, and seeks to achieve objectives. (Source: blueskysearch.com).
On the other hand, a CEO needs to be a person that seeks change, has a long term time horizon, and has vision. That is why the finance department trains its personnel to have a horizon of the financial year. Nevertheless, the finance manager typically uses logic and formal authority to seek action. In contrast, the...
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