More common, but still rare, are dismissals that are obviously for cause. Including executives who were placed on administrative leave while their companies investigated suspected wrongdoing, and those who resigned while suspected of misconduct, CEOs and CFOs who were "dismissed" accounted for 5% or fewer of all departures in the Midcap 1500 in each of the past five years.
To be sure, the abrupt departure of a CEO can be good news for an ambitious CFO, since finance chiefs are often the designated pinch hitters in such scenarios, as is the case at HP and Sara Lee. However, both CFOs and boards should consider that fact with some caution. If a CFO is considered a feasible permanent successor to the CEO, it's preferable to have a board member step in as interim CEO, says Beresford, "because it doesn't prejudice the process of who will be chosen as the permanent CEO." (Indeed, HP CFO and interim CEO Cathie Lesjak has already indicated she is not seeking the position full-time.)
At the same time, a board shouldn't rely too heavily on a CFO to fill in, considering that he or she may be gone before the CEO. The number of CFO departures in the CFO Midcap 1500 has outpaced CEO departures in each of past five years, according to Audit Analytics data.
Editor's note: the original version of this story understated how rare deaths and dismissals of CEOs and CFOs in the CFO Midcap 1500 have been during the last five years. The story has been revised accordingly.
Reader Comments» Post a comment