Recently, CFO succession has received increasingly similar treatment as its more common companion: CEO succession… Why? The CFO serves as the CEO’s right hand man, meaning that he is frequently a member of the supervisory board. More importantly however, the CFO tenure is short, averaging slightly less than 5 years in large MNCs. Upon completing the tenure, they are likely to be in demand for the role as CEO, Chairman or Non-Executive Director.
How is a successful CFO succession strategy achieved? Several different aspects must be considered, starting with an understanding of the company’s business agenda and future plans. Next, the structure of the finance function needs to be examined by investigating strengths and areas of improvement. In most organisations there are two categories of CFOs: Those who fall under M&A, Tax or Treasury; and those who are CFOs of business divisions. Both of these groups naturally have their own strengths and weaknesses.
The solution to creating a well rounded CFO is to actively manage their career paths. By being rotated through a series of assignments, and allowing the individual to gain wide ranges of experience, their broad functional and managerial skills will be tailored to the role.
Two years before the current CFO intends to step down, several processes need to be completed. Candidates must be placed in positions that will address remaining gaps in their development before receiving a final evaluation. If the company decides to include external CFO-ready candidates in the process, the decision must be made earlier on in the process in order to decrease uncertainty amongst potential candidates.
Although CFO succession may not receive similar attention as CEO succession, it is evident that it warrants an ongoing place in the board’s agenda. This attention will ensure that the company has a solid pipeline of finance executives with the necessary competencies for the job.
Please click here to read the full article “Best Practices for Developing a CFO Talent Pipeline”.
American Express Company | American Express Company has announced the appointment of Jeffrey Campbell as Executive Vice President and CFO. Mr Campbell will succeed Daniel Henry, who will be retiring later this year. Mr Campbell Currently holds the role of EVP and CFO at McKesson Corporation.
Liverpool Football Club | Liverpool Football Club has appointed Andy Hughes CFO. Mr Hughes replaces Philip Nash, who stood down in February citing “family reasons”. He was previously CFO at Guoman and Thistle Hotels.
Microsoft | Microsoft has announced Amy Hood will replace Peter Klein as the first woman in a CFO position at the organisation. Ms Hood joined the company in 2002, and most recently served as CFO of Microsoft Business Division.
Volvo Cars | Volvo Cars (owned by China’s Zhejiang Geely Holding Group) has announced Hans Oscarsson will be the CFO from August 2013. Mr Oscarsson is currently deputy CFO and operations controller.
Acrux | Australian pharmaceutical company Acrux has appointed former Financial Controller Tony Di Pietro, CFO.
China Life Insurance Company | China Life Insurance Company has announced Yang Zheng will act as the CFO. Mr Zheng has been a Director of China Life Asset Management since 2009 and a Director of Sino-Ocean Land Holdings since 2011.
Diageo Asia-Pacific | Vinod Rao has become the new Finance Director for Diageo Asia-Pacific. Previously, Mr Rao held the role of Asia-Pacific CFO & VP at PepsiCo.
Hong Kong Exchanges and Clearing | Hong Kong Exchanges and Clearing (HKEx) announced Paul Michael Kennedy has been appointed CFO. His most recent position was Special Adviser to the HKex CEO, with a focus on financial matters.
Manhattan Resources | Manhattan Resources has appointed Choo Hsun Yang CFO. Mr Hsun replaces Lee Hui Gek who left to join the SP Corporation. He has previously held positions with BNP Paribas and recently set up his own management consultancy firm.
Orica Limited | Craig Elkington will take the role of CFO of Orica Limited from Noel Meehan in November 2013. Mr Elkington is currently the Head of Global Mining Services at Orica.
Sinovac Biotech | Sinovac Biotech has appointed Nan Wang CFO. She was formerly VP and oversaw the business development, strategic management and investment functions.
StarHub | Nicholas Tan has been appointed CFO of Singaporean telecommunications provider StarHub. Mr Tan replaces Kwek Buck Chye, who is set to retire in September. He is currently the SVP Corporate Planning at ST Telemedia.
Treasury Wine Estates | Treasury Wine Estates has appointed Tony Reeves CFO. Mr Reeves was formely CFO at Fosters Group.
Russell Reynolds Associates is a global leader in assessment, recruitment and succession planning for Chief Executive Officers, boards of directors, and key roles within the C-suite. With more than 300 consultants in 41 offices around the world, we work closely with both public and private organizations across all industries and regions. We help our clients build boards and executive teams that can meet the challenges and opportunities presented by the digital, economic, environmental and political trends that are reshaping the global business environment. www.russellreynolds.com. Follow us on Twitter: @RRAonLeadership