While CFO turnover over the past few years has been trendingupward at publicly held companies, actual turnover declined in thefirst quarter of 2007 against the same three-months the yearbefore, according to a study by Liberum Research. Unlike the firstquarter of 2006, when the number of CFO changes jumped 38% to 630from 457 in the first three months of 2005, the number of CFOsleaving their posts between January and the end of March in 2007declined 22%, to 489. The report notes that this slowdown in CFOturnover, along with all C-level turnover, marks the secondstraight quarter of year-over-year declines for both CFOs andC-level in general, although there was a slight increase inturnover from the fourth quarter of 2006.

Despite the slowdown, notes Liberum, the overall level ofturnover among CFOs remains high. While the disenchantment in theyears following passage of Sarbanes-Oxley and other governmentregulatory burdens is well known, Liberum also attributes thecontinuing high numbers in turnover to growing competition, bothdomestically and internationally, and increasing complexity ofbusiness. “We attribute much of the rise in CFO turnover to theburdensome aspects of Sarbanes-Oxley,” says Richard Jancovitz,senior vice president and director of research at Liberum Research.“The regulatory aspects of the job made it more difficult for themto take a strategic approach and emphasized the bean counter aspectof the role, especially at some of the midsize and smallercompanies. But now I believe that the pendulum is swinging back sothat CFOs are able once again to take a more strategic approach.”Still, an entrepreneurial strain among CFOs has been driving someto hedge funds and private equity groups, where there is almost noregulation and lots of opportunities to turn strategies intoprofits.

While Liberum expects the overall level of change at the financehelm to remain high, there are signs that turnover is moderating:In March 2007, only 148 CFOs left their positions, as opposed to341 who left in the first two months of the quarter. Out of the148, 51 were hired from outside of the company, rather than beingpromoted from within.