Deloitte’s Q2 2024 CFO Signals survey released this morning found that about 25% of firms have no formal succession plan in place. And among those that said there isn’t a plan, 28% of those respondents were from enterprises earning at least $10 billion in revenue.

The survey included 200 CFOs at firms making at least $1 billion in annual revenue, with respondents from the U.S., Canada, and Mexico. More than 60% of the CFOs represent public companies.

I discussed the findings with Steve Gallucci, Deloitte’s global and U.S. CFO program leader, who said the data certainly caught his attention. “You’re starting to see more churn in the CFO role, and one would think that it would cause companies to ramp up succession planning,” he added.

However, the role of CFO continues to evolve “at a very fast clip,” he told me. For some companies seeking a finance chief, what he’s hearing is that CEOs and boards are realizing they need an executive with different skill sets beyond those of a traditional CFO. And that could mean hiring someone from outside of the company.

At companies that do have a succession plan in place, 29% of CFOs indicated their CEO is primarily in charge of creating and maintaining the said plan, according to the report. Another 24% attributed the responsibility to the chief human resources officer or someone in that department.

A part of succession planning is identifying and training workers and senior managers who demonstrate the potential to be leaders. But, given the rate of turnover, a finance exec within an organization once viewed as a possible successor could now be poached by another company seeking a CFO. For example, in January, I talked with Saori Casey, who was hired as the CFO of Sonos. Casey joined the company from Apple where she was the VP of finance for almost 13 years. 

Regarding skill sets, 37% of finance chiefs view operational experience as one of the three most important factors in a potential replacement, according to Deloitte’s report. Meanwhile, 30% said familiarity with new technologies—including GenAI, machine learning, and cloud computing—28% said accounting skills, and FP&A skills were only cited by 24% of participants. That’s far different compared to about 15 years ago.

While finance and accounting acumen is still “critically important,” Gallucci told me, nowadays that’s just table stakes, and if a talented finance chief—or potential finance chief—were to lack a key piece of knowledge, they’d likely be astute enough to have a team member who could plug that gap.

“The CFO role,” Gallucci added, “continues to allow much more of a commercial focus, and a focus on value creation.”

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Mohammed G. (Rally) Zerhouni was named SVP and CFO at Middlesex Water Company (Nasdaq: MSEX), effective June 24. Zerhouni joins Middlesex following a search for a successor to SVP, treasurer and CFO A. Bruce O’Connor, who will retire from the company effective June 21 after 34 years of service. Zerhouni was most recently the SVP of finance and principal accounting officer of SJW Group. Before that, he was the CFO for Veolia North America.

Lewis Black was named EVP, CFO, and treasurer at SolarWinds (NYSE: SWI), a provider of IT management software, effective in August. Black will succeed J. Barton Kalsu, who gave his resignation on June 6. Kalsu will remain as CFO through Aug. 15. Black brings over 25 years of experience, having served in financial and operational roles at AT&T, Lucent Technologies, Avaya, and Citrix. He most recently served as CEO of Actian, a hybrid data management, analytics, and integration company, and previously as SVP and CFO. 

Big Deal

Tax leaders are expected to play a critical role in informing business strategy, according to the BDO’s 2024 Tax Strategist Survey. The report defines Tax Strategists—the CFOs and chief tax officers surveyed—as key stakeholders in their businesses who are regularly consulted on the potential tax implications of business decisions. Meanwhile, Tax Tacticians also make substantial contributions to their organizations but tend to have more of a limited scope of influence. Tax directors and tax executives surveyed fall into this category.

Investments in outsourcing and co-sourcing, hiring and retaining talent, and upskilling and training programs can help tax leaders focus on value creation. However, strategists recognize the long-term benefits of these investments and are more inclined than tacticians to increase budgets in these areas. 

Nearly half of all organizations say they plan to increase investment in tax risk management in 2024. Top risks for tax leaders include an inability to keep up with changing regulatory requirements, technology challenges or outdated tax technology, and rapid growth, either organic or through an acquisition.

The findings are based on a survey of 180 senior tax leaders at companies with revenues ranging from $250 million to $3 billion.

Going deeper

PennToday highlights interesting research by Wharton’s Michael Platt and collaborators who studied how physiologic measures like heart rate synchrony can guide decision-making in groups. Platt and his colleagues' research found heart rate synchrony “predicted the probability that groups would reach the correct consensus with more than 70% cross-validation accuracy,” according to the report. 

Overheard

“What it really means is that we are in this next phase in the company.”

—Mira Murati, chief technology officer at OpenAI, said on stage at Fortune’s Most Powerful Women Dinner in San Francisco on Tuesday. On Monday, OpenAI named Sarah Friar, former CEO of neighborhood social network Nextdoor, as its CFO. It also appointed Kevin Weil as its new chief product officer. Many in Silicon Valley speculated that the hirings were in preparation for a future initial public offering. But Murati said that the new executives are bringing new skills and leadership, Fortune reported.