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

Despite the slowdown, notes Liberum, the overall level of turnover among CFOs remains high. While the disenchantment in the years following passage of Sarbanes-Oxley and other government regulatory burdens is well known, Liberum also attributes the continuing high numbers in turnover to growing competition, both domestically and internationally, and increasing complexity of business. "We attribute much of the rise in CFO turnover to the burdensome 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 them to take a strategic approach and emphasized the bean counter aspect of the role, especially at some of the midsize and smaller companies. But now I believe that the pendulum is swinging back so that CFOs are able once again to take a more strategic approach." Still, an entrepreneurial strain among CFOs has been driving some to hedge funds and private equity groups, where there is almost no regulation and lots of opportunities to turn strategies into profits.

While Liberum expects the overall level of change at the finance helm to remain high, there are signs that turnover is moderating: In March 2007, only 148 CFOs left their positions, as opposed to 341 who left in the first two months of the quarter. Out of the 148, 51 were hired from outside of the company, rather than being promoted from within.