The Sudden Departures of CFOs

Rewriting corporate budgets seemingly daily. Bargaining with banks over broken loan covenants. Answering constant calls from investors and board directors. And, in extreme cases, figuring out how to make payroll. All while working with no colleagues around. Is it any wonder now that so many chief financial officers have recently said, “It’s time to do something else”?

The number of CFOs—usually the second in command at a corporation—who are leaving their current job or looking for something new has surged over the summer. In just one week in early August, the high-profile CFOs at General Motors, Cisco Systems, and Avis Budget Group announced they were departing. According to one survey, 80 finance chiefs of S&P 500- or Fortune 500-listed firms left their positions through the start of August, compared with 84 at this point last year–a remarkable figure, experts say, because there was a period of about six weeks during the spring when there were almost no CFO changes.

It’s a trend that experts believe will likely continue as the pandemic continues to disrupt the finances of organizations in every industry everywhere. “This crisis will create a demand for radical, creative thinking that has often been lacking from finance leaders,” says Beau Lambert, a Korn Ferry senior client partner in the firm’s Financial Officers practice.

Experts attribute the surge in movement to a variety of reasons. Some CFOs, after helping their companies get through the period where lockdowns crippled revenues, have decided they’ve had enough. “They’re saying, ‘I have an amazing career—I’m taking the chips off the table and going home,’” Lambert says.

The lockdown period was a time when CFOs were working nonstop just to keep their organizations afloat, or if that was impossible, guide them into bankruptcy. Now these top finance leaders have had a chance to self-reflect, something they may have never done before because they’ve always been “knee-deep in the mess,” says Barry Toren, leader of Korn Ferry’s Financial Officers practice. The process has left some energized and looking for a new challenge at a different organization.

That recent career decision hasn’t always been in the CFO’s hands, however. Some company CEOs, recognizing that the financial road ahead is not going to look like it did before the pandemic, are looking for new financial talent they think is better suited to the task. “We see seasoned CFOs stepping down—of their own volition or otherwise—in order to allow a new, perhaps better-equipped, generation of finance leaders to navigate through the uncertain present and future,” says Katie Gleber, an associate in Korn Ferry’s Financial Officers practice.

Experts say the pandemic has accelerated some trends impacting CFOs that were already in place. Organizations were already looking for CFOs who could do more than just sit in the back office and handle the money. Modern-day CFOs need to be as well or more skilled in business partnering as they are in financial engineering, Lambert says. Today’s CFOs also need to have a much higher tolerance for ambiguity and the ability to inspire others.

One of the offshoots of the pandemic pushing millions to work remotely is that it has made it easier for CFOs to explore the job market. In the past, CFOs usually had to travel for a couple of days to their prospective employer to meet the senior leaders of the organization. Now, Toren says, those job-hunting CFOs can talk to CEOs and directors at two organizations in one day without leaving their house.