Drop in CFO turnover puts spotlight on succession planning for APAC HR leaders

In 2024, CFO turnover in Asia-Pacific dropped by 24%, outpacing the global decline of 7%, according to Russell Reynolds Associates’ 2024 Global CFO Turnover Report. With only 69 new CFO appointments compared to 88 in 2023, the region’s preferences for stability, driven by its unique business landscape, offer critical insights for HR leaders.

Adelin Choy, Executive Director and Asia-Pacific Financial Officers Practice Lead at Russell Reynolds Associates, shares more with HRM Asia on how this trend reflects the region’s family-oriented business culture and what HR teams can do to align talent strategies with these dynamics.

Stability as a cultural cornerstone

The significant decline in CFO turnover underscores Asia-Pacific’s emphasis on long-term leadership stability, particularly in family-controlled businesses, which account for roughly 66% of listed companies in the region. “The lower turnover rate in Asia-Pacific, driven in part by the prevalence of family-owned businesses, suggests a different set of priorities and dynamics at play compared to other regions,” said Choy.

Unlike the S&P 500, which saw its highest CFO turnover in six years, markets like India, Japan, South Korea, China, and South-East Asia prioritise trust and continuity. For HR leaders, this signals the need to foster environments that encourage loyalty and minimise voluntary turnover. However, with an average CFO tenure of 4.7 years—shorter than the global average of 5.8 years—robust succession planning remains non-negotiable.

Choy emphasised, “The need to cultivate deep relationships and trust within family-controlled organisations necessitates a more measured approach to CFO transitions, prioritising long-term stability over rapid change.” HR must build strong internal talent pipelines to ensure seamless leadership transitions, safeguarding business continuity.

Furthermore, Asia-Pacific’s talent development culture reveals a duality: 67% of new CFOs in 2024 were first-timers, and 66% were internal appointments, surpassing global averages of 60% and 54%, respectively.

“We’re seeing a significant number of first-time CFOs stepping into the role, suggesting a desire for fresh perspectives,” Choy noted. “However, the even stronger preference for internal candidates indicates that organisations are prioritising familiarity and deep institutional knowledge.”

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This balance between innovation and continuity offers a roadmap for HR teams. Structured development programmes focusing on strategic thinking, leadership readiness, and cross-functional collaboration are essential to prepare high-potential finance leaders for C-suite roles. Mentorship and sponsorship, combined with rotational assignments in areas such as operations or sustainability, can broaden perspectives and foster confidence.

Given the region’s short CFO tenures, proactive succession planning is critical to identify and groom leaders well in advance.

The evolving CFO role: A call for broader skillsets

CFOs in Asia-Pacific are no longer confined to traditional finance roles. They are increasingly co-leading digital transformation and environmental, social, and governance (ESG) initiatives, driven by economic uncertainty, technological advancements, and sustainability priorities. To support this expanded mandate, HR must recalibrate talent development. Choy advises integrating skills like data analytics, AI, and sustainability strategy into leadership programmes, alongside training in stakeholder communication for CFOs engaging with regulators and investors.

Promoting cross-functional collaboration is equally vital. By enabling finance leaders to work closely with IT, sustainability, and the operations team, HR can equip them to navigate complex challenges. “With the rapid pace of change in digital transformation and ESG expectations, HR can foster a growth mindset among finance leaders to ensure they remain agile and responsive to new challenges as the demands of their roles continue to evolve,” Choy added.