The survey of 700 CFOs found that only 34 percent agreed there is a succession plan in place for their role. Further, when asked if there is an internal, ready now successor, 81 percent of CFOs reported there is none. This number may be surprising, since a recent Korn Ferry analysis found that 51 percent of CFO appointments at the top 1,000 U.S. companies by revenue were filled internally.
“While many companies may not have a formal succession plan in place, they are still relying heavily on their internal options versus external,” said Bryan Proctor, senior client partner and Global Financial Officers practice lead at Korn Ferry. “A formal succession plan can bring great value as it enables strategic development of potential successors and instills confidence in the CEO and Board of their succession options.”
When asked what they are most focused on developing in their direct reports, the top two capabilities the CFOs cited are leadership skills/executive presence at 31 percent, followed by strategic thinking at 21 percent.
“Making the step-up to CFO requires candidates to not only possess strong financial acumen, but general management experience and leadership skills,” said Proctor. “CFOs who focus on developing their people in these areas will have a greater chance in grooming successors for the CFO role.”
The Rise of Data and Analytics in Finance
When asked what their most important strategic priorities are for the year, the largest percentage of CFOs (31 percent) cited the optimal use of data and analytics. An overwhelming majority (84 percent) reported they are already leveraging data in different capacities, such as helping optimize operations, evaluate risk and analyze customer behavior to drive decisions.
Additionally, when it comes to what CFOs wish they could spend more time on, 23 percent said data and business intelligence (BI), the second most common response only after strategy. As CFOs look to instill analytics into the day-to-day operations within Finance, different skillsets on their team may be needed to make this transition. CFOs reported data/BI as one of the three most important capabilities that they are focused on developing in their direct reports.
“In this age of information and the ability to be more predictive, CFOs have the opportunity to drive key business decisions if they have the tools, data and team to interpret. Data and BI can be a huge differentiator in edging out the competition,” said Proctor.
Eye on Diversity
When asked about diversity on their teams, 59 percent of CFOs agreed that their team is diversified enough to reflect their customer base. “This contradicts what we generally see in the market—considering our analysis of the top 1,000 U.S. companies by revenue shows only 16 percent of CFOs are diverse,” said Stephanie Buckles, Korn Ferry senior client partner. “The good news is that our clients are requiring a diverse slate of candidates when recruiting at all levels of the finance function.”
About the Survey
The global survey of 700 CFOs and Finance leaders took place in late 2017.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help companies design their organization – the structure, the roles and responsibilities, as well as how they compensate, develop and motivate their people. As importantly, we help organizations select and hire the talent they need to execute their strategy. Our approximately 7,000 colleagues serve clients in more than 50 countries.