Perspective #02 Recognising Advisory Presence in Finance Teams

The sound of trust leaving the room.

When finance leadership narrows to technical delivery

A finance function can remain technically correct and still lose value at leadership level. A CFO role is no longer judged only by accuracy, control and reporting discipline. Boards also look for someone who can explain trade-offs clearly, influence decisions beyond finance, and hold credibility across functions when pressure rises. When that dimension is weak, the organisation keeps the technical output but loses part of the leadership function the role is supposed to provide.

That problem becomes more visible when turnover rises.

Picture a finance team with several vacant roles at the same time, created by repeated exits rather than planned redesign. The immediate effect is operational strain. Work has to be redistributed, capacity tightens, and continuity suffers. At senior level the cost is broader. A leadership departure does not only remove expertise. It disrupts relationships, decision routines, trust and informal coordination.

Large-company data suggests this is not a marginal issue. Adidas disclosed 17,711 employee departures in 2024, equivalent to a 30% turnover rate, in its ESRS S1 “Own Workforce” disclosure (Adidas Annual Report 2024, pp. 279–280). Much of that figure came from seasonal retail roles, which have a different risk profile. Senior leadership turnover carries a different kind of cost because those roles are harder to replace and their effects extend well beyond one function.

CFO turnover has also remained elevated. Russell Reynolds Associates reported CFO turnover at 16% in 2023 and around 15% in 2024 across major listed companies. Average tenure fell to roughly 5.8 years, the lowest level in six years. These figures matter because repeated movement in the finance leadership seat usually signals more than a pipeline issue. It often indicates that boards are looking for something the market does not define in purely technical terms.

Why advisory presence matters

Technical competence is the entry requirement for a CFO. Nobody reaches that level without financial expertise, regulatory understanding and control discipline. Those qualities are assumed. They do not fully explain why one finance leader becomes central to decision-making while another remains confined to reporting, control and reassurance.

The difference often appears in how the person operates outside narrow finance tasks. Can they translate financial implications into business judgement? Can they challenge without creating unnecessary friction? Can they help a board or CEO understand what a number means before the issue becomes urgent? Can they maintain trust when the message is unwelcome?

This is the area many organisations are trying to capture when they talk about presence, influence or strategic partnership. The label matters less than the behaviour underneath it. In practice, boards are looking for a finance leader who can combine technical authority with judgement, social range and usable foresight.

Research on executive transitions points in the same direction. Failed senior hires are often traced less to technical incompetence than to behavioural or relational breakdown: poor fit with the environment, weak trust formation, narrow influencing range, or inability to work effectively across the leadership group (Leadership IQ, 2017; HBR Analytics Services, 2019). The exact percentages vary across studies, but the pattern is consistent. Senior leaders usually fail in context, not on paper.

The cost of getting this wrong

The financial cost of executive replacement is substantial on its own. Benchmarks from SHRM and Harvard Business Review place replacement costs for senior hires at roughly two to four times annual salary, with some estimates going higher once lost opportunity, disruption and team effects are included. For a CFO, those costs can expand further because the role sits close to capital allocation, investor communication, risk interpretation and board confidence.

The organisational cost is often less visible and more important. When a CFO has technical command but limited advisory range, several things tend to happen. Cross-functional colleagues stop treating finance as a thinking partner and start treating it as a control gate. Strategic discussions bypass the CFO until numbers are needed. Teams experience precision without direction. Strong people underneath the role may disengage if their day-to-day experience is compliance without perspective.

That is where retention becomes relevant. Teams do not leave only because of workload or pay. They also respond to whether leadership helps them make sense of uncertainty, whether difficult issues can be discussed directly, and whether the function contributes to decisions rather than merely documenting them.

What boards can actually observe

Advisory presence is often described vaguely, which makes it easy to misuse. It becomes more useful when broken into visible patterns.

One indicator is how a finance leader handles ambiguity. Some stay inside safe, tightly controlled responses and return quickly to confirmed figures. Others can hold uncertainty without becoming vague. They ask better questions, frame implications early and show where judgement is required before certainty arrives.

A second indicator is the quality of cross-functional interaction. Does the person speak in a way that others can use, or do they remain trapped in technical correctness that never becomes organisational influence? A CFO does not need to become performative or charismatic. They do need to be legible beyond finance.

A third indicator is behavioural consistency under pressure. Stress changes how people communicate. Some become rigid, over-detailed or defensive. Others remain clear, proportionate and open enough to retain trust while still protecting standards. This is one reason behavioural analysis is relevant in senior assessment. It helps distinguish between technical fluency and leadership credibility when the setting becomes demanding.

A fourth indicator is the pattern that appears around them over time. Are they known across functions as someone who sharpens judgement and improves decision quality? Or are they experienced mainly as a number custodian whose role becomes narrower each year?

A board-level example

In one board-level search, a technically strong CFO candidate did not progress. His financial expertise was evident and his track record stood up well to scrutiny. The concern emerged elsewhere. His answers were long, rigid and difficult to work with in a live discussion. He showed limited peer orientation and little sense of how he would influence a room made up of other senior leaders with competing priorities. The board did not doubt his competence. They doubted his ability to operate as an adviser in a cross-functional leadership setting.

That distinction matters. A company can hire a technically capable CFO and still end up with a finance leader whose contribution remains narrower than the role requires. On paper the appointment looks sound. In practice the leadership system gets less from finance than it expected.

Conclusion

Rising CFO turnover should not be read only as a talent supply issue. In many cases it reflects a tighter expectation around the role itself. Boards still need technical excellence. They also need someone who can convert financial authority into decision support, trust and influence. When that second layer is missing, the cost appears in replacement cycles, weakened leadership integration and poorer organisational judgement.

The real issue is not whether the finance leader can produce correct numbers. It is whether the role still functions as part of the organisation’s decision-making spine.

Sources

Adidas AG (2024). Annual Report 2024 – ESRS S1 “Own Workforce” (pp. 279–280).

Russell Reynolds Associates (2024). Global CFO Turnover Index 2023 – S&P 500 by the Numbers.

CFO Brew (2025). CFO Turnover at Large Companies Stayed High in 2024.

SHRM (2023). Toolkit: Calculating Turnover Costs.

Harvard Business Review Analytics Services (2019). The High Cost of a Bad Hire.

Leadership IQ (2017). Why New Hires Fail.

CFO.com (2025). Employee Turnover Rate Eased to 18% in 2024.