For all the talk about CFOs being CEO candidates, the jump is still a rarity at large companies. But the gradual, long-term waning of the chief operating officer title from the corporate landscape may make it more common in the future.

That decline has been steady since 2000, when 47% of the 669 companies included in either the Fortune 500 or S&P 500 had COOs. This year only  35% do, according to executive-recruiting firm Crist|Kolder’s Volatility Report 2012.

That trend is important for finance chiefs. “When the COO goes away, the CFO is the one most commonly tasked with taking on a lot of operational responsibility,” says Tom Kolder, the recruiter’s president. “That allows him or her to be a much more competitive and compelling candidate for the CEO chair when it becomes available.”

In fact, for the most part large companies today have a COO only when they’re grooming that person to take over the top executive role. Many times, when that changing of the guard occurs, the company does not back-fill the operational role and the CFO becomes the company’s number-two executive.

This year more than half (54%) of those with new CFO jobs who were externally recruited jumped industries in doing so, compared with only 23% of CEO hires from outside the company. “We believe we will find over time that as CFOs take on more operating responsibilities and become more of a succession alternative, that gap is going to close,” Kolder says.

However, the data do not yet show evidence of increasing upward mobility for CFOs. The percentage of chief-executive hires with finance backgrounds, which had spiked far above historical norms during the financial crisis, is now even lower than before the crisis (see chart).

Among CEOs hired in 2012, 47% had mostly recently been COOs, compared with a relatively microscopic 4% who were CFOs. That hasn’t changed much over the years. Among all CEOs  in the dataset no matter when they were hired, 46% were COOs immediately beforehand, compared with 6% who were finance chiefs.

Overall, the market for top executive talent is brisk right now, observes Kolder. “Over the last few years, companies have been very focused on cost, efficiency, and process, and less so on succession planning and investment in management development,” he says. “Now the supply for C-suite talent is woefully behind the demand.”

CFO volatility, which Crist|Kolder defines as the percentage of positions that open up, are filled, or both within a calendar year, is 13.4% this year. That is up from 12.6% in 2011 and 11.8% in 2010, which was the lowest figure since 1995, when the recruiting firm’s statistical analysis began.

(Data for the report is through July 31 and includes projections, based on current and historical trends, through year-end in order to make comparisons with previous years.)

Here are some other nuggets from the analysis:

  • The percentage of externally recruited CFO hires this year, at 45%, is the second-highest since 1995, trailing only the 50% recorded in 2002.
  • Among CEOs hired this year in the energy and financial sectors, 22% and 21%, respectively, have CFO experience. At the other end of the spectrum, only 5% of newly hired technology CEOs have been finance chiefs.
  • Ten percent of CFOs in the dataset are women, led by 16% in the retail sector, but only 7% in health care and technology.
  • A bachelor’s degree is the terminal degree for 39% of CFOs, while for 51% it is an MBA and for 10% it’s another kind of advanced degree.
  • After years of high turnover among CFOs at the 32 companies in the dataset that received TARP funds in late 2008 and 2009, there has been zero turnover so far in 2012.

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