feisty
When a CEO exits without a clear successor waiting, ASX boards reach for the CFO more often than any other executive. The acting CEO appointment is typically framed as a short-term bridge. In practice, it reshapes the entire leadership structure of the company, sometimes permanently.
The CFO acting as CEO is a specific scenario, different from a deputy CEO stepping up or an external interim parachuting in. The CFO already has a relationship with the board. The CFO controls the numbers every director relies on. And the CFO, by taking the acting role, loses the structural independence that makes the position valuable in the first place.
Why the CFO is always the first call
Boards default to the CFO for one practical reason: proximity to the full picture. Every business decision of consequence runs through finance. The CFO knows the cost base, the debt covenants, the capital commitments, and the investor relationships. When the CEO disappears from the org chart without warning, the CFO is the executive least likely to need a briefing period before acting.
That logic is sound in a crisis. It becomes a problem when the acting period extends past six weeks. At that point, the business is running without a CFO doing CFO work and without a real CEO doing CEO work. It has a hybrid figure doing both badly.
The board's job in week one is to start the permanent search. Not month two. Week one.
What the CFO actually changes when acting
Three things shift quickly once the CFO moves into the acting role. First, relationships with the leadership team change. The CFO was a peer to the other C-suite executives yesterday. Today, those executives report to the CFO. Some will treat the new arrangement professionally. Others will spend the acting period positioning themselves for the permanent vacancy. The CFO needs to manage that dynamic without the political capital a permanent CEO would carry.
Second, the CFO's relationship with the board changes. The CFO used to present to the board. Now the CFO is accountable to the board in a fundamentally different way. Board members who previously treated the CFO as a source of data now treat them as someone to evaluate. That shift rarely feels neutral.
Third, the market reads the appointment. Analysts and institutional investors watch whether the acting period is explained clearly or left vague. A CFO stepping up with a clean, specific mandate and a credible search timeline reads differently from a CFO absorbing the role with no public communication about what comes next. The latter signals that the board doesn't have the situation under control.
The specific risk of a long acting period
When a CFO acts as CEO for more than 90 days, the market starts treating the acting appointment as a de facto permanent one. That creates a problem regardless of the outcome. If the board eventually promotes the CFO permanently, the appointment looks reactive rather than deliberate. If the board appoints someone else, the CFO faces a difficult question: return to the CFO seat under a new boss, or leave?
Most CFOs who act as CEO for six months or more don't return to the CFO role. They either get the top job or they resign within 12 months. Boards that let the acting period drift rarely get a clean ending.
This is the same structural tension that appears when the COO is passed over for the CEO role: the acting period creates an expectation that becomes very hard to unwind without losing the executive entirely.
What boards get wrong
The most common mistake is treating the acting appointment as a decision that doesn't need to be explained. Boards announce the acting arrangement in an ASX release, often one paragraph, and then go quiet. Internal staff, investors, and counterparties are left to interpret the silence.
The second mistake is letting the permanent search run too slowly. Six months feels manageable to a board that meets quarterly. To a leadership team running the business day-to-day, six months of uncertainty is corrosive. Key people start taking calls from recruiters. Decisions get deferred because nobody wants to commit resources under a temporary structure.
The third mistake is expecting the acting CFO-CEO to keep doing both jobs at full capacity. Finance doesn't stop. Results seasons don't pause. Investor relations doesn't wait. Without a deputy CFO who can carry the finance function, the company ends up under-resourced in both the top job and the one the CFO just vacated.
When it actually works
The CFO acting as CEO works cleanly in three circumstances. One: the acting period is short, under eight weeks, and the board already had a preferred successor identified before the departure. Two: the CFO has previously held a P&L role outside finance, giving them operational credibility that finance-only executives don't always have. Three: the board actively manages the communication, both internally and to the market, rather than leaving the CFO to manage it alone.
When those three conditions exist, the acting period functions as a genuine bridge. When they don't, the acting CFO-CEO is essentially absorbing institutional risk on behalf of a board that hasn't done its preparation work.
The CFO-to-CEO transition is a legitimate path for certain executives. But it works best as a deliberate promotion, not as an emergency default. Boards that treat the two scenarios as interchangeable tend to find out, too late, that they are not.
What the CFO should negotiate before saying yes
A CFO who accepts an acting CEO role without clear terms is accepting a structurally weak position. Before stepping up, the CFO should have clarity on four things: the expected duration of the acting period, whether the CFO is a candidate for the permanent role, who covers the CFO function during the acting period, and what happens to the CFO's own role if someone else is appointed permanently.
These aren't unreasonable demands. They're the minimum necessary to avoid a situation where the CFO stabilises a business through a crisis and then finds themselves without a chair when the music stops. Boards that are serious about the arrangement answer these questions before the announcement, not after.
The first 90 days after a CEO departure set the tone for everything that follows. A CFO who steps up without those conditions settled is betting on goodwill from a board that is, by definition, already in a difficult position. That's a bet worth understanding before you take it.