According to Russell Reynolds Associates, more than 15 percent of chief financial officers at publicly-listed companies will leave their positions by 2024.
A high retirement rate is one of the main drivers for the turnover level, which was slightly below the record turnover of 16,2% in 2023.
The FTSE 250 index and Standard & Poor’s (S&P), the US stock market index, both saw the highest CFO turnover levels in six years. Over half (54%) outgoing CFOs either retired or took on board roles.
Over a third of graduates (34%) have gone on to become chief executives or company presidents.
The company stated that the high expectations placed on today’s CFOs also drove turnover. CFOs must have strong business acumen and be highly effective communicators, as well as understanding how AI can drive efficiencies, and understand geopolitical impact.
The boards of the largest companies are looking for CFOs who have a wide range of experience. In 2024, 40 percent of CFOs appointed globally will be experienced CFOs. This is the highest percentage since six years.
According to Russell Reynolds the average CFO tenure has dropped by six years, from 5.8 years. This, combined with the high retirement rate, means that businesses must have a robust succession plan in place to fill this important role. The average retirement age has dropped to 56.6.
The proportion of women CFOs is at its highest in six years, with 70 of the 275 CFOs being appointed in 2024. Over half (54%) of these appointments were made internally.
Women CFOs are most prevalent in the financial and technology services industries, where 36% of appointments for technology and 39% for financial services were filled by women.
Ben Jones, Russell Reynolds’ European Chief Financial Officer, described the market pressures on CFOs as “fierce”.
He said that the role is demanding and stressful. “High turnover can also lead to CFO departures as executives seek to create management teams that are aligned with their strategy.”
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