Korn Ferry’s Global Chief Financial Officers practice surveyed 222 chief financial officers (CFOs) on a variety of topics to understand their perspective on the role and the major business trends that are impacting the finance function.
The 2019 CFO Pulse Survey found that, when planning for a successor, only 38% of CFOs believe they have a comprehensive succession plan, and 80% do not feel there is a ready-now successor for their role.
“The number of CFOs who don’t feel they have a formal succession plan or a direct report ready to replace them now should raise concern. And yet, despite the lack of perceived readiness, approximately 60% of appointed CFOs are still sourced internally,” says Bryan Proctor, senior client partner and Global Financial Officers practice lead at Korn Ferry. “It’s critical for organizations to understand their talent balance sheet, have a pipeline of potential leaders, and develop a thoughtful succession strategy that provides transparency on potential and offers experiences necessary to fully prepare CFO successors.”
Additionally, the CFO survey respondents reported strategic thinking (26%) and leadership skills (22%) as the top two capability gaps they are looking to develop in their direct reports. “We know from previous Korn Ferry research that becoming a CFO requires successors to not only have a strong financial background, but also strong operational and strategic leadership skills,” says Proctor.
In response to where CFOs spend their time, driving strategy (32%) topped the list, followed by budgeting and financial planning (16%) and data and business intelligence/analytics (14%). “As CFOs continue to play a larger role in leading their organization, they need to have a strong finance team to focus on the day-to-day finance activities, which will enable the CFO to focus on ‘what’s next’ and how to best deploy capital to support the strategy,” says Proctor.
Additionally, the survey found 41% of CFOs said working at a company going through a transformation was the most valuable career experience for developing the skills they have today. “Transformative experiences may not always be pleasant, but they afford the executive the opportunity to further develop key leadership skills, strategic thinking, and learning agility,” says Proctor.
When it comes to their career path, 65% of CFOs said they want to be a CEO during their career, but nearly one-quarter (23%) said this is the role they want next. “While CFOs remain ambitious, many appreciate that there are still only a few who successfully ascend to CEO directly; last year, it was only 8% of departing CFOs,” says Proctor. “Usually there is a stop along the way as a COO or president of the business in order to round out their operational or commercial experience.” As expected, the next top desired career move reported was to become a CFO at a larger company (34%).