"We are approaching an inflection point in the office of the CFO, and corporate America may soon find that creating shareholder value is
impossible with what is quickly becoming an itinerant CFO," said Richard D'Amaro, Tatum Chairman and CEO. "Many CFOs are fired or resign not because they weren't a good match for the company when they were hired 20 months ago, but rather because the business has evolved so quickly that their capacity and capabilities are no longer an ideal match for the company."

A record 2,302 CFOs left their positions in 2006, according to independent research firm Liberum Research. A recent survey of more than 150 Tatum partners in the firm's Executive Practice indicates that 93 percent believe CFO turnover in 2007 will be as high or higher than 2006. Only seven percent of the respondents expect to see fewer CFO departures in 2007.

The survey also examined causes and solutions for the CFO turnover epidemic. Thirty-seven percent of those surveyed cited compliance and governance issues as the primary driver of turnover, which was followed closely by unreasonable expectations from board members and other stakeholders at 30 percent. Other contributing factors included lack of work/life balance (13 percent), CFO skills not aligning with the natural evolution of a business (12 percent) and inadequate IT infrastructure supporting business needs such as financial reporting (6 percent).

When the survey respondents were asked what would be most effective at reducing CFO turnover, 27 percent said providing additional resources such as specialized staff to support expanded duties such as working extensively with board members and overseeing compliance activities, while 25 percent cited deregulation and relaxing compliance/governance requirements.

Additionally, 23 percent said more support from board members would help, while 14 percent suggested improved mentoring/professional
development programs. Finally, 11 percent said better alignment between technology infrastructure and business demands would slow CFO turnover.

"The perfect storm of regulatory environment and unprecedented demands from internal stakeholders and external market pressures have made executives understandably pessimistic about CFO tenures in the near future," D'Amaro said. "However, resourceful leaders can break the cycle of churning financial leadership by recognizing that the role and the needs of the CFO have evolved and by changing their approach to providing resources so the CFO can be effective."

The survey was conducted in January 2007 by Tatum, LLC, and polled 163 Executive Practice partners.