A profession in change: Chief financial officers’ characteristics and backgrounds in large German companies

Abstract

Growing competition, increasing uncertainty, globalization, and deregulation made the nature of what companies do increasingly complex, and especially corporate accounting has become more and more important. This has put chief financial officers (CFOs) on the spot and into a key leading position. This paper commences by briefly reviewing extant empirical findings on CFO characteristics and their effects on firm processes and outcomes. Then, it investigates how the profession of the CFO has changed over time by analyzing changes in demographic characteristics and professional backgrounds of CFOs of German DAX companies over the past 20 years. The findings show changes in the CFO profession specifically with regard to CFO appointment age, professional experience (i.e., breadth of non-company and non-industry lifers, hiring of company and industry outsiders), and educational background (i.e., the role of educational level). Furthermore, the results for DAX CFOs are compared to data pertaining to the CFOs of midcap companies (i.e., MDAX). The respective analyses indicate a noticeable difference with regard to appointment age, professional experience (i.e., work experience, percentage of company-lifers, international experience), and educational level.