Shareholders and board members should brace themselves for record turnover among chief financial officers this year, according to a survey from executive services firm Tatum LLC.Based on a poll of more than 150 of Tatum’s Executive Practice partners (who now provide interim or permanent leadership to client organizations), the survey results suggest that Sarbanes-Oxley-related headaches unrealistic demands from board members and chief executives will drive more than 2,300 chief financial officers from their positions in 2007.
“Corporate America may soon find that creating shareholder value is impossible with what is quickly becoming an itinerant chief financial officer," said Tatum chairman and chief executive Richard D'Amaro, in a statement. "Many CFOs are fired or resign not because they weren't a good match for the company when they were hired 20 months ago, but rather because the business has evolved so quickly that their capacity and capabilities are no longer an ideal match for the company."
A record 2,302 chief financial officers left their positions in 2006, according to independent research firm Liberum Research and more than 90 percent of the Tatum survey respondents believe turnover will be as high, or higher, in 2007.
Among the contributing turnover factors cited in the survey were:
- Compliance and governance issues (cited by 37 percent of respondents);
- Unreasonable expectations from board members and other stakeholders (30 percent);
- Lack of work/life balance (13 percent);
- Skills not aligning with the natural evolution of a business (12 percent); and,
- Inadequate IT infrastructure supporting business needs, such as financial reporting (6 percent).
When the survey respondents were asked what would be most effective at reducing CFO turnover, 27 percent said providing additional resources, such as specialized staff to support expanded duties, and 25 percent cited deregulation and relaxing compliance/governance requirements. Additional survey details are available at www.tatumllc.com.
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