Amid the evolving geopolitical landscape, the challenge of inflationary business pressures, and the rapid pace of AI integration, organisations require a new, highly adaptable generation of financial leaders. External factors have sharpened the demand for multiskilled, adaptable C-suite leaders, particularly for those that take on the chief financial officer role within the FTSE 100. Their contribution to boards has never been more important in driving a competitive edge and sustainable growth in today’s business environment.

Our most recent CFO Turnover Index found that global CFO turnover has been increasing consistently, reaching a seven-year high this year. This could be attributed to a range of modern pressures.

First, we’ve witnessed geopolitical uncertainty and rapid technological transformations, which have been repeatedly cited as the primary concerns of many top executives. This confirms what many of us already instinctively know: that uncertainty is the new normal, and it’s forcing companies’ leadership teams to consistently innovate and keep up with change.

A broader skill set

But the external environment isn’t the only factor impacting CFO turnover. Top leadership responsibilities have been expanding substantially in recent years and, as such, the CFO role has come to demand a much broader skill set that goes beyond just financial expertise.

Today’s CFO must serve as a trusted adviser for the CEO, taking on operational responsibility and often becoming their potential successor. As well as being a key contributor to the company’s mission and culture, CFOs are expected to be fluent in regulatory complexities, address activist investor concerns, and leverage emerging technologies to drive innovation throughout businesses. It isn’t just an expanded job description; it’s a fundamental redefinition of leadership.

As demands of the role continually evolve, many incumbent CFOs are considering their next moves. In H1 2025, over half (56%) of departing CFOs retired or moved on to board roles exclusively, markedly above the seven-year average of 41% and likely contributing to the increased turnover rates.

The importance of transition

CFO transitions are important junctures for a company. A strong transition can kickstart an upward trajectory if done well and is important to minimise business disruption. Transitions can also present significant risks: CFO departures can often cause an organisation’s share price to decline as investors brace for future instability.

Internal succession planning often provides noticeable benefits to smooth potential instability, including familiarity with company culture as well as clear mandate and scope.  Long-term succession planning is central to any CFO turnover and should be in place long before an incumbent seeks to move on.

Our turnover data shows leadership teams are increasingly aware of this. Many have sought to mitigate the risks of a CFO departure by initiating carefully planned internal successions. For instance, in the first half of this year, 57% of incoming CFOs were appointed internally.

4 steps for seamless transition

With high risks around CFO succession, seamless planning is critical. In fact, it is often the difference between long-term stability and sudden, unexpected shocks. Successful succession plans are built on four, carefully structured steps: aligning on success factors, defining the talent pool, selecting the successor, and managing the transition.

1  Alignment establishes the requirements of the new CFO, considering the context and challenges of the company, and deciding where the new CFO fits within this. Often, though not always, this means candidates should have different skill sets than the incumbent CFO, which equip them with the tools needed to effectively deal with an evolving landscape.

2  Once key stakeholders are engaged and success factors are agreed upon, the talent pool must be defined. At this point, viable internal candidates are identified, assessed against the success profile, and put through custom development programmes that prepare them for the role. It is important that internal candidates know they are being considered, to assure transparency and retention. Companies should also monitor external candidates, since they may need to hire and develop to address any gaps in their bench before the time comes for succession.

3  When the time comes for selection, companies should evaluate candidates against their bespoke CFO success criteria. Even with the successor confirmed, the succession plan is not finished.

4  Companies should outline a minimum 12-month transition programme to onboard the new CFO to their role and align with senior leadership. This is a critical period for the incoming leader to build relationships and set strategic direction.

In summary, the dynamic evolution of the CFO role presents an opportunity for boards to redefine and elevate their leadership teams. More than just managing turnover, embracing strategic succession planning is core to empowering the next generation of financial leaders. This commitment to nurturing talent will ensure organisations are not merely weathering the storm but navigating winds of change to drive much-needed economic growth.

Ben Jones is co-leader of the European CFO practice at consultancy Russell Reynolds Associates.