What Does the Path to Chief Financial Officer Look Like? – An Optimal Matching Analysis Approach

Abstract

This study focuses on a key actor at the top of the firm: the chief financial officer (CFO). Despite the importance of this role, we still know very little about CFO careers. The purpose of this paper is thus to identify CFO career patterns and drivers of these career patterns. I employ optimal matching analysis, a form of sequence analysis, to a unique dataset of 97 German CFOs to identify five CFO career patterns: international expert, expert outsider, cross-functional outsider, transitioning insider, and expert insider. These patterns differ significantly in terms of organizational tenure, international experience, and functional experience of the CFOs. Three factors predict which career pattern a CFO follows: the level of education, the entry organization, and the entry industry. This has implications for the ones seeking a career in the finance function and for future research on top management careers.