Prudential announces FTSE 100’s 26th CFO change in 2023

Whatever lay behind the sudden dismissal of Prudential’s chief financial officer James Turner, a breach of conduct rules is an unusual reason for someone to leave such a position, even in a year when no fewer than 26 changes in CFO have already been announced by FTSE 100 firms.

Shareholder pressure on the board after poor operational or share price performance, retirement, getting (or missing out on) the job of chief executive, the promotion of a predecessor to the top job, the appointment of an interim CFO after a sudden change or the desire for a fresh challenge are all much more common.
 
The number of planned changes in CFO this year is well above the post-2000 average of 15 and is also the second-highest since 2000, with only the covid-hit year of 2020 having a greater impact.

Source: Company accounts. *2023 changes as already announced or happened. FTSE 100 performance to date
 
Mr Turner’s immediate departure means that seventeen changes of CFO have already come into effect, with nine more announced, six of which have been scheduled for this year. The other three – at DS Smith, JD Sports and Unilever – have a less well-defined timeline, with Graeme Pitkethly’s term at Unilever running until the May 2024 annual general meeting at the latest.

Source: Company accounts
 
One notable trend is the departure of some of the longest-serving CFOs. John Bason at AB Foods entered 2023 with the longest term in office, dating back to 1999, and the next person on that list, SSE’s Gregor Alexander, will also retire shortly.
 
Another five of the twenty-longest serving CFOs are also slated to step down in 2023 (or up, in the case of Scottish Mortgage’s Justin Dowley, who will switch from head of the audit committee to chair after the AGM and Fiona McBain’s departure from that role at the end of June). The changes at SSE, Scottish Mortgage, Schroders, DS Smith, Severn Trent and Unilever would take the average FTSE 100 CFO’s tenure down from 4.1 years to just 3.5 if they all happened today, as 61 members of the index have appointed a new number cruncher since the start of 2020.

Source: Company accounts. *Names in italics have announced their departure from the role of CFO
 
While keen followers of corporate governors will note with interest the rigour with which Prudential has applied its code of conduct for executives in the case of Mr Turner, they may well also approve of the gender mix among the newly appointed ranks of CFOs.
 
Seven female CFOs (or heads of audit, in the case of Julie Tankard at Foreign & Colonial Investment Trust) were appointed in 2022 and five more have been selected in 2023, with another four to come (including another head of audit at an investment trust, this time Sharon Flood at Scottish Mortgage).
 
Although Julie Brown switched to GSK from Burberry and Joanna Pearson and Stephanie Bruce stepped aside at Endeavour Mining and abdrn respectively, the number of female CFOs in the FTSE 100 now stands at 24, with an average term to date of 2.1 years, and all things being equal will be 28 by the end of 2023, although Vodafone will presumably find a successor to Margherita Della Valle and spare her the twin burden of being both CEO and CFO.

Source: Company accounts

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