According to a press release, 19% of Fortune 500 companies changed CFOs in 2005, compared with 16% in 2004 and 13% in 2003. Nearly a third (32%) of CFOs in that group resigned the position. Russell Reynolds attributes this to pressures of the job created by regulatory changes (See Study: CFO’s Work Increasingly Challenging).
“Four years removed from the introduction of Sarbanes-Oxley,” said Lorraine Hack, a member of Russell Reynolds Associates’ Financial Officers Practice, in the release, “we would have expected that the strains of Sarbox implementation would be nearing an end or at least tapering off. Instead, financial officers continue to feel the burden of heavy regulatory and accounting pressures. As such, many CFOs will argue that the job has become harder, not easier, with every passing year.”
Additionally, while the CFO position was once considered a training ground for CEOs, study findings indicate that this is changing. According to the study, in 2005, 19% of the turnover was due to promotions, compared to 30% in 2004.
Looking into the turnover rate for other financial officers, Russell Reynolds found that, in 2005, 18% of Fortune 500 Controllers changed positions. Twenty-two percent of that group resigned. Thirteen percent of Fortune 500 treasurers changed positions in 2005, with resignations accounting for 22% of that group.
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