First-half turnover among CFOs at public companies worldwide took a bit of a leap in 2024 compared to recent years, with the proportion of outgoing finance chiefs reaching 8.9%, according to Russell Reynolds, which released the data. Last year’s first-half rate was 7.4%.
Things were somewhat calmer in the United States, with 7.8% of S&P 500 CFOs leaving their posts, although that too was up, from 6.0% in the first half of 2023.
The increased activity indicates that “as economic uncertainty becomes the new normal for organizations, previous trepidation to replace CFOs has dissipated,” said Russell Reynolds.
In addition, the executive search and leadership advisory firm said, high CFO turnover reflects CFOs increasingly being considered as CEO candidates; CEOs often replacing their finance leader within the first year of their tenure; and increased retirement rates amongst CFOs post-pandemic.
As for CFO appointments, Russell Reynolds reported a global total of 163 in the recently ended first half, compared with 151 in the first six months of 2023.
It was a strong first half for women CFOs. While women remain under-represented, among the 163 appointments, 44, or 27%, were women. The pace was even greater within the S&P 500, where a third (33%) of the appointments in the first half were women, the highest percentage in five years.
The technology industry in particular has made large strides in gender diversity, with 38% of incoming tech CFOs being women, the highest proportion since the first half of 2021.
“To build on this progress and achieve true gender balance in the CFO role, organizations must continue to build robust and diverse internal pipelines and invest in structured sponsorship programs that target underrepresented groups,” Russell Reynolds opined.
With more CFO departures overall, CFO tenures naturally are shortening. The average global tenure reached a five-year low of 5.7 years in the first half. A big stimulus to the turnover was a spike in retirements, with 54% of outgoing finance chiefs retiring or moving to board roles exclusively. That was also a five-year high, and up 15 percentage points from the first half of 2023.
Within the S&P 500, though, 54% of outgoing CFOs moved to new full-time roles, both because demand for experienced finance chiefs is increasing, and many of those in transition are moving to non-CFO roles.
S&P 500 companies are also doing a better job of succession planning than those in other regions, with most CFOs promoted internally and 71% of them being in the role for the first time, compared with 61% globally.
By industry, the healthcare (14.2%) and technology sectors (11.1%) had the highest turnover in the first half. “Increased retirement rates, high levels of CEO turnover within the industries at the end of 2022 and throughout 2023, and lower market performances over the past two years have many organizations rethinking their CFO,” Russell Reynolds said.
