What Is Driving CEOs and CFOs to Call It Quits

Leadership exodus is making headlines and not in a good way. With record numbers of chief executives and financial officers bidding farewell to their posts, the corporate world is left scratching its head. What’s behind the mass exodus, what’s the fallout, and could there be a silver lining for finance professionals? Let’s dive in.

Is the C-Suite Under Siege?

As of November 2024, a staggering 1,991 CEOs across U.S. public and private companies, nonprofits, and government agencies announced their departure. This marks an all-time high since tracking began in 2002, surpassing the previous record of 1,914 in 2023. Among public companies alone, 327 CEOs have left this year exceeding 2019’s peak of 312. But why are leaders stepping down faster than you can say “golden parachute”? Experts point to a cocktail of factors:

• Economic Uncertainty: Looming fears over 2025’s economic and political instability, including tariff threats and trade restrictions, are pushing CEOs to hit the eject button.
• Burnout and Scrutiny: Today’s CEOs face relentless shareholder pressure and public criticism. The post-pandemic world demands agility and resilience that can wear even the strongest leaders thin.
• The Private Sector Appeal: Many leaders are trading the glare of public company life for private firms, which offer lucrative equity-based packages and a more forgiving regulatory environment.

As Rich Fields from Russell Reynolds put it, “The growth of private capital means there are places where you can make more money without the shareholder constraints of a public company.”

CFOs Aren’t Immune to the Exodus

It’s not just CEOs packing their bags. CFOs, often the backbone of an organization, are also jumping ship at record rates. According to Datarails, the average CFO tenure has dropped to just over three years, with some lasting less than two. From 2018 to 2023, 152 companies cycled through three CFOs—an unsettling trend for businesses reliant on financial stability. Why the shuffle?

• Quarterly Earnings Grind: CFOs are often on the frontlines of investor expectations, juggling short-term performance metrics with long-term strategy. This “tyranny of quarterly earnings” is a burnout recipe.
• Attractive Alternatives: Like CEOs, CFOs are eyeing opportunities in private equity or advisory roles that offer fewer public pressures and more financial upside.

What Does This Mean for Businesses?

The ripple effects of high-level turnover aren’t pretty. Here’s what organizations might face:

• Shortened Tenures and Instability: With the average CEO and CFO tenure shrinking, organizations risk losing strategic continuity. The constant churn can make it harder to build trust with investors, employees, and stakeholders.
• Interim Leadership Risks: Many companies are turning to interim leaders as trial runs. While this can minimize disruptions, it also signals uncertainty, which can unsettle employees and shareholders alike.
• Employee Morale Hits: A revolving door in leadership can trickle down, leaving employees wondering about the company’s direction and their own job security.

Is There a Silver Lining?

For CFOs and finance professionals, this turmoil could present a unique opportunity. Here’s why:

• Path to CEO Roles: Historically, CFOs have been overlooked for CEO positions, but this trend is shifting. CFOs bring a data-driven, financially grasp perspective that can be invaluable in turbulent times.
• Consulting and Advisory Roles: The growing private equity landscape offers lucrative alternatives for finance leaders, enabling them to leverage their expertise without the public pressures.
• Increased Influence: With fewer long-term leaders at the helm, CFOs may find themselves stepping into more prominent decision-making roles, shaping strategy alongside interim or incoming CEOs.

What Needs to Change

As Jason Baumgarten of Spencer Stuart aptly said, “If you tear those people down all the time, there’ll be nobody left who wants leadership roles.” Companies must rethink their leadership models to make top jobs desirable again. For CFOs and CEOs alike, it’s time to embrace:

• Collective Leadership: Moving away from the “heroic CEO” model toward shared responsibility and cross-functional collaboration.
• Work-Life Balance: Addressing burnout by providing better support systems and reducing the relentless pace of public company leadership.
• Equity for Impact: Offering compensation structures that reward long-term results over short-term wins, aligning with sustainable business goals.
• Upskill Continuously: Develop expertise in high-demand areas like AI-driven financial tools, ESG metrics, and strategic planning.

A Hard Look at Big Changes

Leadership turnover is no longer just a trend, it’s a wake-up call. For CFOs and finance professionals, the shifting corporate landscape brings challenges but also opportunities to redefine their roles and influence. The question is, will organizations rise to the occasion or find themselves chanting, “What a waste of money!” like disgruntled football fans? As 2025 looms, one thing’s for sure: The corner office isn’t as cozy as it used to be. Subscribe to MYCPE ONE Insights for the latest in finance, accounting, and corporate news delivered straight to your inbox.