Even $10 billion companies are struggling to find their next CFO: ‘You’re starting to see more churn’

Good morning. Some of the biggest companies are stumbling a bit when it comes to locking in their next finance chief.

Deloitte’s Q2 2024 CFO Signals survey released this morning found that about 25% of firms have no formal succession plan in place. And among those that said there isn't a plan, 28% of those respondents were from enterprises earning at least $10 billion in revenue.

The survey included 200 CFOs at firms making at least $1 billion in annual revenue, with respondents from the U.S., Canada, and Mexico. More than 60% of the CFOs represent public companies.

I discussed the findings with Steve Gallucci, Deloitte’s global and U.S. CFO program leader, who said the data certainly caught his attention. “You're starting to see more churn in the CFO role, and one would think that it would cause companies to ramp up succession planning,” he added.

However, the role of CFO continues to evolve “at a very fast clip,” he told me. For some companies seeking a finance chief, what he’s hearing is that CEOs and boards are realizing they need an executive with different skill sets beyond those of a traditional CFO. And that could mean hiring someone from outside of the company.

At companies that do have a succession plan in place, 29% of CFOs indicated their CEO is primarily in charge of creating and maintaining the said plan, according to the report. Another 24% attributed the responsibility to the chief human resources officer or someone in that department.

A part of succession planning is identifying and training workers and senior managers who demonstrate the potential to be leaders. But, given the rate of turnover, a finance exec within an organization once viewed as a possible successor could now be poached by another company seeking a CFO. For example, in January, I talked with Saori Casey, who was hired as the CFO of Sonos. Casey joined the company from Apple where she was the VP of finance for almost 13 years.

Regarding skill sets, 37% of finance chiefs view operational experience as one of the three most important factors in a potential replacement, according to Deloitte's report. Meanwhile, 30% said familiarity with new technologies—including GenAI, machine learning, and cloud computing—28% said accounting skills, and FP&A skills were only cited by 24% of participants. That’s far different compared to about 15 years ago.

While finance and accounting acumen is still "critically important," Gallucci told me, nowadays that's just table stakes, and if a talented finance chief—or potential finance chief—were to lack a key piece of knowledge, they'd likely be astute enough to have a team member who could plug that gap.

“The CFO role," Gallucci added, "continues to allow much more of a commercial focus, and a focus on value creation."

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com