Two-fifths (41%) of business leaders believe CFOs moving into CEO positions is the main reason for the UK’s current CFO shortage.

Furthermore, there has only been a 2% increase in the number of CFOs entering the role in the past twelve months.

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Currently, one in three FTSE CEOs have previously served as CFOs, a 21% increase from 2019.

This is according to specialist recruitment company Robert Walters, which also found that 45% see a financial background as most advantageous for the CEO role.

To compare, only 21% felt that those from a legal background serve well as a CEO, followed by 9% who believe those from a HR background would be suitable for the role.

Lucy Bisset, director of Robert Walters, said: “The role of Chief Financial Officer has changed rapidly over the last 18 months – and with recently reported gaps in the talent pool it is more important than ever that employers are not only aware of the aspects driving professionals away from the position but also how they can attract them back.”

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She added: “It’s unsurprising that we are seeing an increased movement of CFO talent to CEO roles – in recession markets, companies and their boards want Chief Executives who have a keen financial and strategy-driven head – skills essential in a CFO’s repertoire – there is real value placed on the ability to sail a company through choppy economic waters rather than just consider its top-line growth.”

CFOs and CEOs retiring

In addition, 38% of business leaders stated the increased number of more senior, seasoned CFOs opting for early retirement as another reason for the CFO talent gap.

The trend of CFOs taking an early exit in their late 50s rather than early 60s – with the average age of a CFO at 52 years whilst the average age of appointment stands at 46 – it leaves a short timeframe between appointment and an early retirement.

Also, twenty-nine FTSE 100 businesses, including Unilever and Schroders, changed their CFO in 2023 — the most since at least 2013.

Bisset stated: “The movement of more seasoned talent out of the hiring pool will pose a problem to companies who don’t have a strong succession plan in place for this critically important position. The experience and skills which are accrued across a career, cannot simply be replaced by a quick hire.”