More than a quarter of FTSE 100 have changed CFO this year as macroeconomic conditions demand changing skillsets

• FTSE 100 CFO turnover for the first three quarters of 2023 is highest since at least 2019
• FTSE 100 is 8 years from CFO gender parity at the current rate of change, as 39% of CFOs appointed this year are women
• Global figures reveal that 200 CFOs in listed companies have left their jobs in 2023 – 45 of them from FTSE 350

November 6th 2023, London – More than a quarter (26%) of FTSE 100 Chief Financial Officers have left their jobs so far in 2023, according to data from Russell Reynolds Associates.¹ This is already the highest rate for five years and almost double the 14 CFOs who left FTSE 100 companies in the first three quarters of 2022.

The Global CFO Turnover Index also showed that worldwide, CFO turnover is at a 5-year high, with 200 leaving their jobs in the first three quarters of 2023. In the same period last year, 196 finance chiefs at listed companies departed their posts.

Macroeconomic conditions, the broadening role of the CFO, and the availability of new opportunities in private equity-owned businesses have all contributed to ever more departures from listed companies.

The record turnover in CFOs follows a period of accelerated CEO turnover, which last year reached a five-year high of 175 and in the first three quarters of this year already stands at 142. Many of these leaders are looking to freshen up their top teams with a new generation of strategically minded CFOs. Increasingly CEOs are looking for CFOs with greater leadership and communication skills, capable of assisting CEOs on everything from long-term strategy to innovation and digital transformation.

The changes come amid a challenging outlook for CFOs. Rises in interest rates have meant many businesses which were previously servicing cheap debt are now facing much higher repayments. The value of long-term incentive plans for CFOs has also failed to recover post pandemic while, in the UK, proposed reforms to audit policies have created a further consideration for CFOs. Although many were willing to persevere through the immediate challenges of the pandemic, CFOs are now questioning whether the benefits of the role outweigh the challenges ahead.

The decline of these incentives, coupled with the greatly expanded nature of the CFO role, has led to significant numbers of current CFO talent rethinking their career plans. Together, these factors are encouraging CFOs to retire from executive roles in record numbers. In Q1-Q3 this year, 61% of Europe’s departing CFOs were retirees, compared to just 46% in the same period in 2022. The average age CFOs retire from executive roles in Europe is just 56.

Ben Jones, Co-head of the Financial Officers practice in EMEA at Russell Reynolds Associates, said:

“CEO turnover has reached record highs in recent years and incoming CEOs often look to appoint a new CFO reasonably quickly to support strategy change. This trend has been compounded by chief executives who are increasingly looking for CFOs to advise on strategy, whilst having the operational grip to drive transformation and adopt or integrate the benefits of a digital capability.

“The overall scope of the CFO continues to broaden and accelerate in its contribution to the performance of the business. When coupled with the most challenging economic environment in decades and a rising tide of regulation, many CFOs are increasingly considering their current positions. Whether that means moving to a portfolio career, private equity, or into an advisory role without the burden of the levels of compliance in the public company arena.

“Departing CFOs are often in demand for other board roles. They may be appointed to   audit committees, or increasingly onto remuneration committees, where their financial skills are becoming highly relevant given the level of data, investor and previous board experience is highly valued. It is also worth noting that given the influence required of a CFO and the lack of ego, CFOs often become very successful and much respected Chairs.”

FTSE 100 is 8 years from CFO gender parity, as 39% of new CFOs this year are women

The index has also revealed the progress that is being made in the CFO role toward gender parity across different markets.

In the FTSE 100, four of the five CFOs (80%) appointed in the last quarter were women, as well as nine of the 23 (39%) appointed Q1-Q3 this year. Russell Reynolds’ research revealed that the FTSE 100 is 8 years from gender parity in the CFO role at the current rate of progress.

This contrasts with the S&P 500, where just 21% of CFO appointments this quarter and 22% of appointments this year to date were women. The US’ largest companies are currently 32 years away from CFO gender parity.

Globally, more women were appointed to CFO positions than ever before this year, with 49 appointed in the first three quarters of the year.

Suzzane Wood, Consultant at Russell Reynolds Associates, said:

“In addition to being an increasingly strategic role, the CFO position is an established springboard to CEO. It is really encouraging to see more women being appointed at the UK’s leading companies. It’s also encouraging that women CFOs are being increasingly sought after by boards.

“However, the fact that a majority of women CFOs across Europe were external hires suggests some work still needs to be done in ensuring gender-balanced pipelines.”

Notes to the Editor

_{1. The headline figures for FTSE 100 CFO Turnover is accurate to 26th October 2023. All other figures cover the period Q1-Q3 2023, from 1st January to 30th September.}

_{2. Russell Reynolds Associates’ Global Index of CFO Turnover tracks CEO departures from constituent companies of the following global stock indices: ASX 200, CAC 40, DAX 40, Euronext 100, FTSE 100, FTSE 250, HANG SENG, Nikkei 225, NSE Nifty 50, S&P 500, S&P/TSX Composite and STI. More data and analysis can be found at the dedicated Global Index of CFO Turnover section of the Russell Reynolds website: Global CFO Turnover Index | Russell Reynolds Associates}

_{*Dax 40 data prior to September 20th 2021 originates from Dax 30 data.}

Media Contacts

Russell Reynolds Associates: Sarah Carlyle, Marketing Director EMEA
Email: sarah.carlyle@russellreynolds.com