CFO retirements hit six year high amid increasing regulatory burdens
Over 15 per cent of chief financial officers (CFOs) left their roles at listed companies over the last year due to heightened regulatory requirements.
CFO departures reached their highest rate in six years for the UK and US, according to research from Russell Reynolds Associates.
This has caused the average tenure of the executive members to reduce from 6.2 years to just 5.8 years in 2024.
A high retirement rate has been one of the leading causes of the spike in turnover, coming in just below the record level set in 2023.
Over half of the outgoing financial officers moved into board roles or retired, a 10 percentage point spike from last year, while 34 per cent became chief executives or company presidents.
Ben Jones, co-head of Russell Reynolds’ European CFO practice, described market pressure on CFOs as “fierce”, with high levels of regulation causing “increasing levels of stress”.
The regulatory burden on public companies has been ramping up in recent years, which could be pushing CFOs to look towards private companies instead, Jones explained.
“Market pressure on the CFO is fierce given some of the uncontrollables in the global context, such as regulation, tariffs and inflation,” he added.
Pressure from activist investors has also put additional demands on company executives.
“The way the CFO needs to balance risk and the risk portfolio outlook now looks quite different,” explained Adelin Choy, head of Russell Reynolds’ APAC CFO practice.
“Companies are looking for CFOs who have dealt with similar challenges, and who are in a better position to advise the CEO or the board on what they need to do financially to prepare for some of the regulatory battles they are facing.”
Russell Reynolds’ data also revealed that 70 out of the 275 CFOs appointed last year were women, the highest proportion in six years. 54 per cent of these were internal appointments.