Pandemic Fallout: Sudden Surge In CFO Exits

September 22, 2021 –

The pressure on chief financial officers during the pandemic has been significant: 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.

A new Korn Ferry report, authored by Beau Lambert, senior client partner in the firm’s financial officers practice, and practice leader Barry Toren, asks if it’s any wonder that so many chief financial officers have recently decided that 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 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,” said Mr. Lambert. “This crisis will create a demand for radical, creative thinking that has often been lacking from finance leaders.”

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,’” Mr. Lambert said.

The lockdown period was a time when CFOs were working non-stop 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,’” said Mr. Toren. “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, the Korn Ferry report said. Some company CEOs, recognizing that the financial road ahead is going to look different than 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,” said Katie Gleber, an associate in Korn Ferry’s financial officers practice.

COVID-19’s Effect

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,” Mr. Lambert said. “Modern-day CFOs need to be as well or more skilled in business partnering as they are in financial engineering.” 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 those job-hunting CFOs can talk to CEOs and directors at two organizations in one day without leaving their house,” said Mr. Toren.

Expanding Role

The aftermath of the pandemic is creating additional dimensions in a CFO role that has already evolved significantly in recent years, said Kent Burns, president of Simply Driven Search, a member of Kaye Bassman Sanford Rose Network. “Leadership and mentoring are more challenging with COVID-driven virtual work. Soft skills and EQ in a CFO are more critical now than probably any time in history. The world-class CFOs I speak with understand the unprecedented importance of making relational dynamics a high priority on a daily basis.” The little things are not little things right now, he said.

At the core, the risk factors are dramatically different as survivability of the business becomes Job 1. “The health and well-being of the leadership team has become paramount,” said Bernard Layton, managing director at Comhar Partners. “At the end of the day, the role of CFO is now a wisdom strategy and risk management role. That risk management portion of the role grows here as well as advising where to go with the business. And ultimately protecting cash is going to be a key for survivability of the business.”

CFOs, he said, are apprising the CEO of various scenarios vis-à-vis planning and managing around various business outcomes, Mr. Layton said. “They’re also mentoring and managing a team that has their own scope of responsibilities, controllership cash, treasury, financial planning, analysis and so on. In many cases, they’re even performing a human resources role, i.e., reporting in and keeping the team upbeat, motivated and looking past their own concerns towards the broader business objectives – these are all part of an expanding and challenging role.”

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