A 2023 snapshot of the profiles of CFOs from mostly large public companies showed a growth in CFO seats held by women, more external CFO hires for the first time since the pandemic, and an increase in CFOs ascending to CEO. The CFO role is also becoming more ethnically and racially diverse.
The number of women CFOs continued its gradual climb in 2023, as 18.5% (124) of sitting CFOs were women, up from 10% in 2013. Consumer industries continued to lead the way, with 30 women holding CFO positions in those businesses, while health care lagged with only eight women CFOs. The number of ethnically and racially diverse CFOs is also increasing slowly, with 86 people with such backgrounds holding CFO positions last year, up from 59 as late as 2019.
Directionally, the data on CFOs at 674 companies during all of 2023, produced annually by search firm Crist|Kolder Associates, represented progress for those wishing to see people from a wider variety of backgrounds make it to the CFO spot. It was also good news for finance chiefs who hope to be CEO one day, with 8.4% of last year’s CEOs having come directly from a CFO position — the highest percentage since Crist|Kolder started collecting and analyzing this data in 2013.
While CFO turnover used to grab the headlines when reports like Crist|Kolder’s published, high CFO turnover (nearly 17% in 2023) has become a fact of life in the last few years. CFO turnover varies by industry, of course — health care had the fewest CFO switches (8%), while services businesses had the highest (18.8%).
The average CFO tenure among the selected companies was 4.7 years. The energy industry had the lowest average CFO tenure, at four years, followed by high-profile consumer-facing companies, at 4.3 years.
The rise in external CFO hires — about 43% of new CFOs were recruited from outside the company — shows many finance chiefs are more willing to pursue outside job opportunities and there was more demand for such people. But internal candidates still have an edge, with 57% of departing CFOs last year being replaced by an internal candidate.
Last year saw little change in who was promoted to CFO, though. The prized finance chair continued to be awarded most often to people holding the title of VP, SVP, or EVP of finance, or some kind of FP&A leadership title, similar to 2022. Corporate controllers and chief accounting officers made it to the CFO second most frequently, followed by divisional presidents, treasurers, and executives holding investment banking, development, or planning/strategy titles.
Other findings from the Crist|Kolder 2023 volatility report included the following:
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PwC has produced more 2023 sitting CFOs than any other Big Four accounting firm — 75 of 2023’s CFOs cut their teeth in public accounting at PwC. Overall, 39% of the CFOs had public accounting experience.
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Almost 15% of sitting CFOs spent time at a top investment bank, Goldman Sachs, Morgan Stanley, and Merrill Lynch being the most common. That figure was 5 percentage points higher than in 2022.
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Nearly a third of sitting CFOs are under 50, with the average age being 51.9 years old. Slightly more than half of sitting CFOs were hired before the age of 50.
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At the undergraduate level, public universities produced 10% more sitting CFOs than private ones. Penn State, the University of Virginia, and the University of Connecticut had the highest number of alumni in the CFO office in 2023.
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Nearly 53% of sitting CFOs had an MBA degree, compared with 39% who are CPAs (the highest percentage since 2018). Nearly 14% hold both designations, but one-in-five CFOs hold neither.