Dive Brief:

• Four times more CFOs transitioned to the role of chief executive officer in 2022 than in 2021, according to a recent report from the management consulting firm Russell Reynolds. 
• “As organizations move to create optionality in their succession plans, the CFO is increasingly becoming a favorable choice to develop due to their competencies and board exposure,” the report said. 
• Finance heads’ growing ambitions to climb the C-suite ranks happen against the backdrop of the accounting profession becoming increasingly unfavorable, with many accounting professionals at all levels demanding mental health help from their organizations and experiencing burnout that affects their work. 

Dive Insight:

Although plunging initial public offering proceeds and increased market volatility make job security favorable, there was an “unseasonal” increase in CFO turnover as recessionary headwinds became clearer, the report said. 

The quarterly percentage for CFO turnover in the fourth quarter of the fiscal year rose from 12% in 2021 to 18% in 2022. 

As CFO retirement rates increased for the first time in three years, other CFOs are looking to move on from the financial helm and take the top executive seat. 

About four in five CFOs are opting to move to non-CFOs roles, with most of them shifting to president or CEO jobs, according to the report. 

These finance chiefs may be well-seasoned for the CEO role, as many already feel as though their responsibilities have crept well beyond accounting ledgers and Excel spreadsheets. 

Whether due to ongoing job creep, including pressures of dipping into the realms of human resources and IT on top of taking care of the books, or optionality in succession plans, CFOs are also transitioning into non-finance VP roles or division president roles, according to the report. 

There is some evidence that finance heads may steer their organizations poorly after becoming CEOs — only 8% of CFOs-turned-CEOs posted top-quartile performance for their organizations, according to a Spencer Stuart report — and those who take other roles may better develop skills and competencies for the top seat, the report said.

Meanwhile, more organizations are on the hunt for “operating” or “wartime” CFOs keen on keeping expenses low ahead of an increasingly likely economic downturn. 

As external CFO hires have been on the decline since the pandemic, 62% of turnover is being filled by succession plan candidates, the report said.