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The Art of Timing: Strategic Finance Hires for IPO Triumph
Article
Insights on key finance executives for an IPO
Strategic Finance Hires for IPO Triumph
Methodology
Russell Reynolds Associates analyzed the experience, archetypes, and route to the top of key finance executives at the US companies with the largest IPOs in 2021.
The Power of Timing
The US IPO market has experienced significant turbulence and uncertainty, with 2023 being the worst year for IPOs since the financial crisis. However, despite the challenges, there is a growing sense of optimism among bankers, who foresee a more favorable landscape with a soft opening in 2024 and a surge of IPO activity in 2025.
Despite the ambiguity around timing, organizations aiming to go public in the next few years have the certainty to make a critical decision: ensuring they have the right finance team.
Selecting a skilled and knowledgeable finance team becomes paramount as companies strategize their IPO journey. To better understand the right timing, experience, and archetypes for these key finance hires, Russell Reynolds completed this analysis so organizations can have certainty in hiring the right finance team for IPO triumph.
Must-have Finance Talent for an IPO
Beyond a CFO for IPO, an accounting officer, an audit committee chair (ACC), and a head of investor relations have proven to be critical hires amongst the most successful IPO companies. Experience, archetypes, and timing of these hires vary depending on the organizational strategy, existing talent, and skills gaps.
The majority of organizations hire externally for their IPO finance team
Key Finance Role Placements, Experience and Appointment Timing
- Accounting Officers and Audit Committee Chairs (ACC) are must-have hires pre-IPO, while fewer opted to hire a head of IR before the IPO.
- The ACC remains in the role the longest post-IPO, often bringing IPO experience themselves.
Source: RRA Analysis of Key Finance Executives at the Largest IPOs in 2021, US, N= 101
While important to an IPO, heads of IR having IPO experience isn’t essential to IPO success
87% of organizations hired a Head of IR before or shortly after IPO, mostly hiring externally.
The majority of Heads of IR are hired externally
Head of IR archetypes
The majority of IR leaders are placed pre-IPO, and few bring IPO experience
Source: RRA Analysis of Key Finance Executives at the Largest IPOs in 2021, US, N= 101
Accounting officers are a key hire pre-IPO, on average appointed 2 years before IPO
98% of organizations have an accounting officer, and 85% had them in place before or shortly after the IPO.
The majority of accounting officers are hired externally
Accounting officer archetypes
The majority of accounting officers are placed pre-IPO, and few bring IPO experience
|
85%appointed their accounting officer before IPO |
2 yearsaverage tenure of accounting officers appointed before IPO |
Source: RRA Analysis of Key Finance Executives at the Largest IPOs in 2021, US, N= 101
Audit committee chairs are most likely to bring IPO experience, lending their expertise pre and post-IPO
The ACC stays in role longer than other IPO Finance team members
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1.7 yearsaverage tenure of appointed ACC before IPO |
Almost half of IPO ACCs bring IPO experience
Source: RRA Analysis of Key Finance Executives at the Largest IPOs in 2021, US, N= 101
Authors
Chris Faralli is a senior member of Russell Reynolds Associates’ Financial Officers’ practice. He is based in San Francisco.
Bea Constable is a member of Russell Reynolds Associates’ Financial Officers’ practice. She is based in Boston.
Catherine Schroeder leads Russell Reynolds Associates’ Financial Officers’ Knowledge team. She is based in Toronto.
The Art of Timing: Strategic Finance Hires for IPO Triumph