As a business evolves, it will encounter the need to build credibility with outside parties, such as investors and lenders, and to make well-informed strategic decisions. In short, financial...Read more »
CFO turnover on the decline
Big business appears to be increasing the focus on strategic fiscal management as CFO turnover within the ranks of large companies dropped 28% last year. An article on cfo.com titled Downturn in Turnoverillustrates this trend with some impressive statistics, such as:
- CFO turnover within the Fortune 1000 dropped to 13% from a high of 19% in 2007 and 18% in 2008
- Turnover rates were lowest within the consumer, financial services, and technology segments, coming in at 9%
- Rates were the highest within the telecommunications sector at 24%
Additional trends in CFO hiring and retention came to light as well. For example, the importance of operational knowledge is highlighted by the number of corporate CFOs with finance backgrounds who have then become divisional presidents before being promoted to the C Suite. This number increased from 12% in 2008 to 22% in 2009. In these instances, the institutional knowledge that these professionals bring with them to the role is invaluable to the company they serve.
Whether a CFO is promoted from within or recruited away from another company at the same level, one thing appears certain: the CFO role is more important than ever, and that’s a trend that doesn’t appear to be going away any time soon.