Nearly Half of CFOs Don’t Have A Succession Plan
The Wall Street Journal article, “Nearly Half of CFOs Don’t Have A Succession Plan,” quoted Russell Reynolds Associates Consultant Jenna Fisher, who shares the importance of CFO succession plans and her insight on best practices. The article is excerpted below.
Many finance chiefs don’t have a clear plan in place to pass the baton.
A Robert Half Management Resources survey of 1,100 CFOs found that 48% haven’t identified a successor. Among CFOs who haven’t picked a successor, roughly two-thirds said they have no plans to leave soon. Other reasons include the absence of qualified candidates at the company and the need to focus on other priorities.
While only a slim majority have a succession plan, the survey indicates increased attention to the CFO position, said Jenna Fisher, head of the global corporate sector at executive search firm Russell Reynolds Associates, who estimated that less than 10% of clients had a CFO succession plan five years ago.
“The role of CFO has become more salient,” she said. Finance chiefs have become pivotal at fighting off activist investors and
Bigger companies also have the advantage of being able to afford a deeper bench of potential CFO successors—and the ability to keep potential replacements challenged with a variety of roles as they rise in the organization, Ms. Fisher said.
A typical CFO search takes about six months, and keeping a strong internal candidate in the shadows throughout this time could be demotivating to that person, Ms. Fisher said.
“You can shorten your time to search by 50% by being prepared,” she said. A strong internal candidate and a regularly updated list of the top individuals who could be the new CFO can expedite the search and limit disruption to the business, Ms. Fisher said.
To read the full article, click here.