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CFO succession planning leaves a lot to be desired.
Janet Kersnar, CFO Europe Magazine
November 5, 2007
Shortly before CFO Europe went to press, Karl-Henrik Sundström stepped down as finance chief of Ericsson. His resignation didn't come as a surprise — the Swedish telecom-equipment firm had stunned investors with a profit warning and Sundström took the rap.
Swift CFO departures — under whatever circumstance — are something that Corporate Europe should be growing accustomed to. Finance tenures continue to shorten as CFOs job-hop more than ever. But that doesn't mean companies are more prepared. While Ericsson quickly filled the vacant post with Hans Vestberg, one of its young star executives, how many other companies can say with confidence that they're ready for the day when their CFOs leave?
Surprisingly few, reports "Who's Next?" A new survey of CFOs by Robert Half Management Resources found that nearly 85% of the companies surveyed haven't identified potential successors for the top finance job, despite the fact that more than half of CFO posts are filled by internal promotions. Sure, succession planning is time-consuming and can stir up office politics. Yet according to the succession-planning CFOs we interviewed, the benefits to staff development and to the company overall far outweigh any risks.
Of course, one way to mitigate the risk of losing one's job is to generate value that shareholders expect. With a new ranking prepared for CFO Europe by The Boston Consulting Group, "The Rich List" looks at how that can being done as companies put the cash on their balance sheets to good use. What do all our top-ranking companies have in common? CFOs who know how to deliver results over the short term while retaining enough financial flexibility to invest for the long haul.