For some reason, quite a few people pitching articles to CFO still feel compelled to point out to us that being a finance chief is “no longer all about the numbers.” Yes, we know.
But even we were surprised by new research suggesting that from a CFO’s point of view, failing to meeting financial goals is nowhere near the surest way to get bumped from the role.
Korn Ferry, the executive recruiter and people advisory firm, asked 321 CFOs to identify the top reason a company would choose to switch to a different finance leader. Only 8% of them pointed to “not meeting the company’s financial goals.” (See chart below.)
Instead, relationships were thought to be far more important, with 55% of respondents saying they’d most likely get booted from the role if they had a poor working relationship with the CEO or the board of directors (41%), or if they had personality issues or weren’t able to work well with or lead others (14%).
“This proves that the CFO role is about much more than profit or loss,” says Bryan Proctor, a senior client partner at Korn Ferry and global leader of its financial officer practice. “It’s about helping lead the strategic trajectory of an organization for overall success and developing the required relationships.”
But if there were a poor working relationship with the CEO, most finance chiefs wouldn’t hang around waiting for the ax to fall. More than half (52%) of those surveyed cited it as the number-one reason they’d voluntarily leave a company. (See chart below.)
When considering what’s next for their careers, a third of the CFOs said their desired next move is to become a CFO of a larger company. Nearly a quarter (23%) said they would like to be a CEO in their next role, but only one third of those either agreed or strongly agreed that they are a likely successor to the CEO position at their current company.
As for what type of experience they most need to gain in order to become a CEO, the top responses were commercial experience (30%), industry depth (27%), and operational experience (25%).
Those experiences were notably different from the ones deemed most critical for being a finance chief: general management (27%), strategy/M&A (26%), and financial planning and analysis (14%).
Only 2% of respondents said risk/compliance was most critical, yet the survey showed they are spending a lot of their time in that area. Among the CFO respondents from publicly traded companies, nearly one-third (31%) said they spend between 15% and 25% of their efforts on such public-company activities as SEC reporting, investor relations, and compliance. Nearly one-fifth (17%) said they spend between 26% and half of their time on such activities.
“Many CFOs are spending a disproportionate amount of time on compliance at the expense of broader strategic business issues,” says Proctor. “That’s why it’s critical for the CFO to build a strong, trusted finance team whose members can competently complete tactical work.”