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Mass exodus of FTSE 100 CFOs in 2023

Author: ICAEW Insights

Published: 14 Dec 2023

Personal motivation and a challenging business environment are factors at play, according to headhunter Russell Reynolds Associates. For their replacements, recruiting organisations are increasingly focusing on capabilities, behaviours and values.

CFO turnover across the FTSE 100 is at a five-year high, as many finance chiefs question whether the benefits of the role outweigh the challenges ahead, according to headhunter Russell Reynolds Associates.

More than a quarter of CFOs from across the UK’s largest companies have left their jobs so far in 2023, almost double the 14 CFOs who left FTSE 100 companies in the first three quarters of last year.

Macroeconomic conditions, a broadening CFO remit and the availability of new opportunities in private equity-owned businesses are all cited as reasons behind the mass exodus. 

The headhunter says that record CEO turnover over the same period is changing the profile of CFOs as new leaders look to freshen up their top teams with a new generation of strategically minded CFOs. In particular, leadership and communication skills are rising to the fore as CEOs seek finance chiefs who can assist them on everything from long-term strategy to innovation and digital innovation.

Suzzane Wood, Consultant at Russell Reynolds Associates, says a combination of personal motivation and a challenging business environment were factors at play. “It's not that CFOs are suddenly running for the door because the world is burning. They are still in very important leadership roles, and they recognise the need for stamina and resilience to succeed in that role. But what you’re also seeing is a generation who can afford to retire and take their expertise to do different things. 

“We’ve always seen people being able to take their executive career into a non-executive arena, but that’s been happening a bit younger, especially driven by digitalisation and the new economy. Private equity is looking to take more and more corporate talent for their portfolio companies and in their own firms. And they are paying better base salaries than they traditionally did to attract the right people.” 

Wood says the volume of regulation was a factor in the decision by some CFOs to move out of a listed environment. “It is dominating some board discussions, more than maybe some CFOs would like it to, particularly if you’re a strongly operational, commercial CFO, close to the coalface.” 

Recruiting organisations are increasingly focusing more on capabilities than ‘badges’, Wood says – although the ACA qualification is still a big tick in a box, she adds. “They are assessing more for behaviours and values. Boards are increasingly looking at the person as a whole and how that person operates in different scenarios. It also means you’re unlikely to go through a process without having been assessed as well as interviewed.”

“Use of data and analytics to have impact and a focus on environmental, social and governance, cybersecurity and digital transformation are of growing importance in terms of the competencies and capabilities of the most sought-after candidates, Wood adds. “There’s a new breed of leadership that has command of those topics.” 

With 13 of the 28 CFOs appointed in Q1-3 this year women, including four of the five CFOs appointed the last quarter, Russell Reynolds’ research suggests that CFO gender parity is eight years’ away at the current rate of progress. In contrast, the largest companies in the US, the S&P 500, are currently 32 years away.

For candidates with their eyes on the CFO FTSE 100 prize, Wood’s advice is to think about how you are creating value for your organisation, not just in terms of business strategy and the numbers, but also coaching, mentoring and being a positive contributor to culture. 

And asked whether the mass exodus of FTSE 100 CFO talent is cause for concern, Wood says most departures are part of well-planned talent strategies. “In the past 10 or 15 years, there’s been a lot more focus among bigger boards particularly on developing talent pipelines. So, what you’re seeing is an opportunity for people internally to move up. 

“Open engagement between executives, board and leadership teams around personal ambition and where they see themselves in the next five years is an ongoing conversation. It’s not taken for granted that you’re going to be there forever. And it’s not taken for granted that you won’t get a call. Nobody likes surprises.”

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