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 …show more content…
II. Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?
My first example is Peter Darbee. Mr. Darbee became the CEO of PG&E (California’s largest investor-owned utility) in January of 2006. He had previously held the position of CFO. Mr. Darbee has no accounting certifications, but he does possess an undergraduate degree from Dartmouth College, and MBA from the Tuck School of Business at Dartmouth and other studies with the Massachusetts Institute of Technology.
My second example is Clarence Otis Jr. Mr. Otis Jr. was promoted from CFO to CEO of Darden Restaurants, Inc. (Red Lobster) in 2006. He received his BA from Williams College in 1977, a JD from Stanford Law in 1980 and has no CPA or CFA certifications.
According to CFO Magazine, in October of 2005 the number of former CFO’s that were promoted to CEO positions in Fortune 500 companies was quite prolific. (Source: CFO Magazine).
Conclusion Based on my research for this Case Assignment, I can conclude that the finance departments are not the best place to train future CEO’s. In