CFO Pulse Survey - Korn...

CFO Pulse Survey 2017

What is the number one reason a CFO would voluntarily leave a company?

2

Korn Ferry’s Financial Officer Center of Expertise surveyed 321 Chief Financial Officers (CFOs)/heads of finance on a variety of questions, ranging from succession planning and talent development to the most critical skills needed for the role, to gain a better understanding of the major challenges and trends impacting CFOs and the finance function.

The 2017 CFO Pulse Survey found that a CFO’s strong working relationship with their company’s CEO and board of directors is critical to achievement and career longevity. When asked why a CFO would voluntarily leave his or her position, more than half (52 percent) of respondents said the top reason is a poor working relationship with the CEO, and 41 percent said not working well with the board and CEO is the top reason a company would ask a CFO to leave. Previous Korn Ferry research has shown that a strong CEO/CFO relationship leads to better overall company performance.

Poor working relationship with the CEO

Inability to align the organization around a change agenda that CFO was hired to drive

Company is not progressing

Insu�cient opportunity for professional growth

Not being recognized for their e�orts

Compensation

Other

52%

13%

13%

11%

6%3% 2%

3

What is the top reason a company would look to make a change to their CFO?

“Surprisingly, only 8 percent of respondents said ‘not meeting the company’s financial goals’ is the top reason a CFO would be removed from his or her post,” said Bryan Proctor, Korn Ferry Senior Client Partner and Global Financial Officer Practice Leader. “This proves that the CFO role is about much more than profit or loss—it’s about helping lead the strategic trajectory of an organization for overall success and developing the relationships that are required.”

5%

Poor working relationship with the CEO/board

Personality issues/inability to work well with or lead others

Inability to directly connect finance e�orts to tangible business outcomes

Inability to align the organization around a change agendathat CFO was hired to drive

Underperforming finance organization

Not meeting the financial goals of the company

Loss of confidence from investors

41%

14%14%

9%

8%8%

4

What is the most critical experience for a CFO?

Having a strong acumen for broader business issues is a high priority, as the largest percentage of respondents (27 percent) said general management is the most critical experience for CFOs, followed closely by strategy/M&A experience at 26 percent.

Only 2 percent of respondents said risk/compliance experience is the most critical experience, yet the survey showed that area is where they are spending a large portion of their time. Of the CFO respondents in publicly traded companies, nearly one-third (31 percent) said they spend between 15 percent and 25 percent of their efforts on public company activities such as SEC reporting, IR and compliance. Nearly one-fifth (17 percent) said they spend between 26 percent 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,” said Proctor. “That’s why it’s critical for the CFO to build a strong, trusted finance team whose members can competently complete tactical work.”

What is the most critical experience for a CFO? !

2%

General Management

Strategy / M&A

FP&A

Capital Markets / Investor Relations

Controllership / Reporting

Risk / Compliance

27%

26%22%

14%7%

5

How important is IT literacy becoming for CFOs?

Beside the CEO, with which other C-suite member does the CFO work most closely?

The survey also found that the needed skill sets of CFOs is expanding, with 88 percent of respondents stating IT literacy is either important or very important to becoming a CFO. However, when asked whom they work most closely with in the C-suite apart from the CEO, only 14 percent said it’s the CIO/CTO.


Very important

Important

Somewhat important

Not important <1%

I don't know <1%

50%38%

11%


COO

General Counsel

CIO/CTO

CHRO

CMO

52%

21%

14%

8%6%

6

How likely is it that the next CFO will come from inside the company?

To what extent would you agree that your company has a solid succession plan for the CFO?

When it comes to planning for the future, 56 percent of CFOs said it is likely that their successor will come from within the company. This is consistent with the rate of internally promoted CFOs previous Korn Ferry research has found in the market. Yet, only 44 percent of respondents agree that there is a solid succession plan in place for the CFO.

4%


Absolutely sure

Very likely

Somewhat likely

Not likely

I don't know

19%

33%

37%

7%


Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

12%

32%

18%

28%

10%

7

Please choose what best describes your next desired career move.

How strongly would you agree that you are considered a successor to the CEO?

“While some companies have a succession plan in place, it’s important for organizations to continually revisit this topic,” said Proctor. “With automation and outsourcing of the function shrinking the overall size of the core finance team, companies need to be vigilant in identifying, developing and supporting the leaders that will drive their future finance strategy.”

When considering what’s next for their careers, a third of the CFOs said their next desired move is to become a CFO of a larger company. Nearly one quarter (23 percent) said they would like to be a CEO in their next role, but only one third either agree or strongly agree that they are a successor to the CEO position in their current company.

2%


Become a CFO of a larger company Become a CEORetireOtherBecome a CFO at a smaller, start-up companyBecome a COOStart your own business

33%

23%17%

10%

8%8%

3%


Strongly agreeAgreeNeither agree nor disagreeDisagreeStrongly disagreeI don't know

26%

7%

29%

21%

13%

8

What is missing from your profile to become a CEO?

When it comes to the skills CFOs admit they are missing to become CEO, commercial experience (30 percent), industry depth (27 percent) and operational experience (25 percent) top the list.

“It’s not surprising we see these skills at the top of the list, since the typical career path for CFOs who become CEOs often takes them into operational experiences,” said Proctor. “Companies would be well suited to ensure CFOs and the finance function as a whole take on general management experiences in order to broaden their operational skills as well as develop their leadership and influencing abilities.”


Commercial experience

Industry depth

Operational experience

Support from Board

Breadth of leadership skills

30%

27%

25%

10%8%

About the studyThe Korn Ferry CFO Pulse Survey of 321 CFOs/heads of finance from major corporations across the globe took place in December 2016. Please note, percentages do not always equal 100 percent due to rounding.

About Korn FerryKorn Ferry is the preeminent global people and organizational advisory firm. We helpleaders, organizations and societies succeed by releasing the full power and potentialof people. Our nearly 7,000 colleagues deliver services through Korn Ferry and ourHay Group and Futurestep divisions. Visit kornferry.com for more information.

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