Latest news with #RussellReynoldsAssociates'
Yahoo
4 days ago
- Business
- Yahoo
Companies vie for ‘tried-and-true' CFOs amid volatility: Russell Reynolds
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Companies seeking their next finance chief are on the hunt for 'tried and true' finance leaders that can help them navigate choppy economic seas, Jim Lawson, co-leader of executive search and leadership advisory firm Russell Reynolds Associates' CFO practice told CFO Dive, with the appointments of first-time CFOs inching downwards in the year's first quarter. Though most new CFO appointments in Q1 2025 (58%) were internal hires, of those that were external hires, 'experienced CFOs are increasingly favored,' Russell Reynolds' Q1 2025 CFO Turnover Index found. Experienced CFOs made up 80% of external hires, a quarterly high on par with results seen in 2021, 'as some organizations continue to navigate complex economic markets and succession plans fail to materialize,' the report found. 'If we don't think our bench is ready quite yet, we would love to bring in a super experienced CFO who has been successful a few times and can bring that seniority in some of these turbulent markets,' Lawson said in an interview of how companies are approaching their CFO hiring strategies. Businesses are putting a growing premium on experienced finance chiefs after CFO turnover reached a six-year high in 2024, RRA previously found. That trend has continued; for the year's first quarter, 95 CFOs were appointed, compared to 89 appointments in the prior year period, the leadership advisory firm found. Finance chiefs are also reporting shorter tenures; in Q1, the average stint in the top financial seat was 5.8 years, slightly below a six-year, full-year average of 6.2 years, RRA found. A top factor that has continued to drive CFO turnover is rising retirement rates, in keeping with trends seen in 2024, 60% of departing finance chiefs either retired or moved exclusively to board positions in Q1, with many choosing not to seek new CFO roles due to factors such as burnout or financial security, or simply because now seems like the right time for retirement, according to the report. However, that growing exodus represents a challenge for businesses today looking for their next finance leader. One of the most troubling trends is 'we don't see the same kind of pipeline that we used to see 10 years ago,' said Jenna Fisher, managing director, global financial officers practice for Russell Reynolds Associates. There's a narrowing number of new accounting and finance graduates — and moreover, many of the training programs or strategies companies may have historically put into place to hone future finance chiefs have since fallen out of common practice, Fisher said. For example, many companies previously tapped investor relation roles as a kind of 'breeding ground' for their next finance chiefs, a tactic that's become less commonplace today in favor of more specialization. 'Every company wants the best head of investor relations and the best treasurer and the best head of FP&A, and so that heterogeneity of experience, that toolkit building, is harder to come by for many aspiring CFOs than it was five, 10 years ago,' Fisher said. 'And so we see a continued struggle in terms of the supply, demand imbalance for CFOs.' Businesses on the hunt for their next finance chief aren't just searching for leaders with financial chops — though such skills are still key — but for CFOs with 'effective communication skills,' Lawson said. 'Effective communication with the board, with the CEO, with the street or investors, that ask has been amplified,' when it comes to firms seeking out their next finance leader, he said. As the demand for experienced finance chiefs becomes more acute, it's critical for companies to find ways to nurture upcoming talent as a way to bridge the supply, demand gap, Fisher said. Russell Reynolds offers a CFO mentor program which works to pair first-time CFOs with finance chiefs who have recently retired, she said. 'We really believe that there need to be more mechanisms for developing excellent CFOs, because we don't see CFOs fail generally, because of a lack of skill set,' Fisher said. 'Generally, it's because they're failing on some of the quote, unquote, softer dimensions. It's communication with the board and CEO. It's the ability to inspire and develop and retain their team.'
Zawya
07-04-2025
- Business
- Zawya
CFO turnover at second-highest on record, amid growing pressure and wave of retirements
54% of outgoing CFOs retired or moved on to board roles – a six-year high – leaving a shrinking talent pool Investing in local finance talent is key to unlocking future CFO success in the Middle East Dubai, UAE – Last year saw the second highest global CFO turnover on record*, driven by investor activism, supply chain disruption, inflation and changing regulation. As a result, 2024 saw CFOs leaving listed firms for opportunities in private equity, to join boards or retire. Russell Reynolds Associates' (RRA) inaugural Global CFO Turnover report saw 15.1% of CFOs at the world's largest listed companies leave their posts in 2024, just shy of 2023's record turnover of 16.2%. The S&P 500 and FTSE 250 both saw the highest level of CFO turnover in six years, with the former matching the peak set in 2021. The report tracks the comings and goings of CFOs from 12 global indices and follows RRA's 2024 Global CEO Turnover report, which found that 2024 saw the highest global CEO turnover on record. The numbers reflect the important partnership between CEO and CFO as listed businesses struggle to deliver complex transformations under intense shareholder scrutiny. The changing nature of the CFO role driving pressure The modern CFO's responsibilities within an organization have expanded far beyond a traditional accounting role. Technological developments, geopolitical disruptions and regulatory challenges now fall within the remit of a CFO, who must also act as an intermediary and communicator for boards and investors. This pressure is leading a number of CFOs to consider whether the role is still worth it. More than half (54%) of outgoing CFOs retired or moved exclusively to board roles – a six-year high. The average CFO tenure is now 5.8 years, and the average age of retirement or making a move to a board role for CFOs now sits at a mere 56.6 years old, the youngest figure in six years. The role of the CFO is also understood by boards as a CEO-in-waiting; of 2024's outgoing CFOs, 34% moved onto President or CEO roles, while 15% went to divisional CEO roles, and 15% to other C-suite positions. Jenna Fisher, RRA Co-Lead Global Financial Officers Practice, said: 'There's been a shift in the archetype of a CFO. The CFO has become the de facto COO with more direct reports – whether it's real estate, facilities, IT or legal – and so the role has become more complex. Often boards want somebody who could potentially be a CEO successor and are asking for that at the outset. Meanwhile, more and more CFOs want to become CEOs.' With average CFO tenures becoming shorter, the pool of adequate CFO candidates is shrinking. This forces boards to carefully consider succession plans from the outset and look towards internal talent. In 2024, 54% of incoming CFOs at a global level were appointed internally. Internally-appointed CFOs have longer tenures – 6.5 years on average, as opposed to 5.9 years for those externally appointed – showing the value of internal succession planning. In the Middle East, insights reveal that companies are becoming more globally integrated and increasingly involved in mergers and acquisitions. This is driving a requirement for skilled CFOs who have experience in capital markets, debt and equity. Burak Gorbon, Head of Financial Services and Financial Officers Practice, MENAT, RRA Middle East, said: "Local market experience is becoming increasingly critical for CFOs in the Middle East. Companies are prioritizing candidates who understand the regional legal framework, regulatory landscape, and unique market dynamics. Investing in local finance talent is essential for future regional success." Record number of women CFOs appointed Of the 275 CFOs appointed in 2024, 70 were women – the highest number in the past six years. Of these, 54% were internal appointments, demonstrating the impact of succession planning and leadership pipelines in opening a wider pool of talent to businesses. When it comes to specific industries, the technology and financial services sectors made large strides in gender diversity, with 36% and 39% of incoming CFOs being women, respectively – twice as a high as 2023 numbers. -Ends- *Data covers the last six years Russell Reynolds Associates' Global Index of CFO Turnover tracks CFO departures from constituent companies of the following global stock indices: ASX 200, CAC 40, DAX, 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 at: Classification of the reasons for CFO departures is derived from a comprehensive review of publicly available information, including news publications, official announcements, and relevant articles around the time of each CFO's departure announcement. This categorization is intended to provide insight into overarching trends and should be interpreted within the context of the best available information at the time of the analysis. About Russell Reynolds Associates Russell Reynolds Associates (RRA) is a global leadership advisory firm. Our 500+ consultants in 47 offices work with public, private, and non-profit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today's challenges and anticipate the digital, economic, and political trends that are reshaping the global business environment. From helping boards with their structure, culture, and effectiveness, to identifying, assessing, and defining the best leadership for organizations, our teams bring their decades of expertise to help clients address their most complex leadership issues. We exist to improve the way the world is led. Media Contacts Russell Reynolds Associates Sarah Carlyle, Marketing Director EMEA Email:
Zawya
30-01-2025
- Business
- Zawya
Record number of CEOs left their roles in 2024 as AI and investor activism drive departures
Across all tracked indices, a record number also lasted less than 36 months on the job in signs of investor impatience for results Tech CEO turnover grew globally by 90% as AI drives transformational change Worldwide, 85% of incoming CEOs were first-timers – with the nature of the role now including more pressure and scrutiny than ever before, fewer candidates consider repeating the role Dubai, UAE – Last year saw the highest global CEO turnover on record* as investor activism, technological change and retirements saw 202 CEOs depart their roles. Russell Reynolds Associates' 2024 Global CEO Turnover report saw 202 CEOs in the world's largest listed companies leave their jobs last year, up by 9% from 2023. The analysis, which tracks incoming and outgoing CEOs from 13 global indices, also found a record number of CEOs (43) departing after less than 36 months as activist investor patience for underperformance ran thin. Rusty O'Kelley, RRA Co-Lead Board and CEO Advisory Partners in the Americas said: 'In addition to dealing with the needs of employees, investors and other stakeholders, CEOs will also need to carefully manage their relationships with governments, and this may well lead to even higher rates of turnover. The bottom line is that the job just got even harder.' The majority of indices saw elevated turnover, with the S&P 500 losing 58 CEOs last year – a 21% increase on 2023 and the second highest on record. The FTSE 100, however, bucked this trend. In a year of political change and economic challenges, FTSE boards largely stuck by their CEOs with only 12 departing in 2024, a 14% decrease on last year. AI increases tech CEO turnover by 90% The highest turnover rate globally was in the technology sector. A record 40 tech CEOs left their posts last year, up 90% on 2023. As AI continues to disrupt business models in the sector, leaders must drive through not just technological progress but cultural, commercial and organizational change as well. As a result, the tech CEO class of 2024 is clearly different to other sectors. Just 8% of incoming tech CEOs last year had previous CEO experience as boards looked for leaders who can combine deep technical understanding, customer centricity and the ability to navigate rapid growth and transformation. This need for agility has seen COO become the most important incubator for CEO talent across all sectors. An ability to think through how technological change can impact not just business models but people, culture and supply chains has seen 21% of all incoming CEOs in 2024 coming from COO roles. RRA consultant and member of the Technology Practice, Sean Roberts said: 'The technology sector is going through a period of profound change, and this change is being turbo-charged by Gen AI, digital infrastructure investment and continued growth in software. This has triggered the creation of new or growing companies requiring CEO talent. However, we have also seen expectations of increased performance or strategic change have a direct impact on the increase in CEO work.' First-time (and only-time) CEOs The report also found that a combination of improved succession planning and increased pressures of the CEO role are making the serial CEO a rarer sight. The vast majority (85%) of incoming CEOs in 2024 were step-up candidates taking on CEO positions for the first time. This is partly explained by a wave of CEO retirements. In the context of rising scrutiny from policymakers and investors, almost a third (30%) of departing CEOs decided to retire from the executive role entirely. As a result, 2024 was a record year for planned successions. Almost a quarter (22%) of all CEO departures occurred as part of a planned succession process with 73% of all incoming CEOs coming from within the organization – an all-time high. This figure was even higher for the tech industry, with 84% of incoming CEOs being internal hires. Laura Sanderson, Co-Head of Europe, Middle East & India at Russell Reynolds Associates said: 'The compounded pressure on CEOs globally has exacerbated the need for adequate succession planning within firms, and last year's figures tell a hugely positive story for this. Firstly, it's a sign that boards are being more proactive and long-term in their thinking when it comes to succession planning and it's also encouraging to see lower levels of CEO removals.' In recent years, the role of the CEO has undergone significant transformation, with business leaders now incurring heightened and often contradictory demands from employees, shareholders and clients, ranging from remote work and office mandates, sustainability credentials and geopolitical involvement, and economic pressures on most business sectors. In an age where CEOs are subjected to more public scrutiny and pressure than ever before, many have decided to not take on repeat CEO posts, becoming one-time CEOs and graduating to board or NED roles following their tenure. Gender parity a decade closer, but still a lifetime away The report's findings show that it will take 72.5 years to reach global CEO gender parity, at the current rate of change. This shows a significant improvement upon last year's figures, which predicted 81 years to reach gender parity at current rates. Nonetheless, the goalpost of parity remains a lifetime away, emphasising that the rate of change must accelerate. The DAX and the FTSE 100 are the indices leading the charge with the fastest acceleration towards gender parity among CEOs, with 33.8 and 39 years remaining, respectively. In 2024, 24 newly appointed women CEOs represented 11% of total appointments – the second highest number of women taking on the post since RRA began collecting data in 2019. With firms placing stronger emphasis on succession plans and CEO churn higher than ever, this creates further opportunities for women leaders to rise to CEO seats previously occupied by men. -Ends- *Data covers the past 6 years Notes: Years to gender parity as of December 2024 is derived from a retrospective analysis projecting the current trend of CEO appointments backward while adjusting for the estimated number of women CEOs at that time. Data should be viewed as a directional indicator due to changes in index composition over the past 12 months. Russell Reynolds Associates' Global Index of CEO Turnover tracks CEO departures from constituent companies of the following global stock indices: ASX 200, CAC 40, DAX, Euronext 100, FTSE 100, FTSE 250, HANG SENG, Nikkei 225, NSE Nifty 50, S&P 500, S&P/TSX Composite, STI and SMI. More data and analysis can be found at the dedicated Global Index of CEO Turnover section of the Russell Reynolds website at: Classification of the reasons for CEO departures is derived from a comprehensive review of publicly available information, including news publications, official announcements, and relevant articles around the time of each CEO's departure announcement. This categorization is intended to provide insight into overarching trends and should be interpreted within the context of the best available information at the time of the analysis. About Russell Reynolds Associates Russell Reynolds Associates (RRA) is a global leadership advisory firm. Our 500+ consultants in 47 offices work with public, private, and non-profit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today's challenges and anticipate the digital, economic, and political trends that are reshaping the global business environment. From helping boards with their structure, culture, and effectiveness, to identifying, assessing, and defining the best leadership for organizations, our teams bring their decades of expertise to help clients address their most complex leadership issues. We exist to improve the way the world is led. Media Contacts Russell Reynolds Associates Sarah Carlyle, Marketing Director EMEA Email:
