Good morning. For finance chiefs, how they delegate isn’t just an operational choice—it can shape the course of their entire career.
CFOs who delegate financial reporting to a strong chief accounting officer are significantly more likely to stay in their roles—and more likely to eventually become a CEO.
The new research finding is part of a study co-authored by Adrienne Rhodes, an assistant professor of accounting at the University of Iowa’s Tippie College of Business. The paper, “Delegation and Chief Financial Officer Retention: Evidence from Chief Accounting Officers on the Executive Team,” published in Management Science, examines what prevents CFO turnover and how delegation shapes executive career paths.
When CFOs shift accounting responsibilities to a chief accounting officer (CAO) who sits on the executive team, they are not only less likely to leave but also less likely to make lateral CFO moves. Instead, they are more likely to advance to the CEO role.
“A chief financial officer who aspires to be a CEO needs experience in strategy and investor-facing tasks,” Rhodes told me in our conversation on Monday. Delegating financial reporting frees CFOs to focus on enterprise leadership skills that boards expect in CEO candidates.
In the recently released paper, researchers analyzed S&P 1500 firms from 2004 to 2019, tracking voluntary CFO departures while stopping before the pandemic to avoid COVID-era distortions. Using financial disclosures, they identified when a CAO served on the executive team and developed a method to distinguish voluntary departures from forced exits.
The central question was straightforward: Does shifting day-to-day financial reporting to a CAO help companies retain their finance chiefs?
According to Rhodes, the answer is yes. Firms with a CAO clearly responsible for financial reporting are about 19% less likely to lose their CFO, after controlling for other factors.
The findings come as demands on finance leaders continue to grow. There’s record CFO turnover in part due to heavier workloads and rising expectations from boards and investors. Drawing on social psychology and burnout research, Rhodes and her coauthors hypothesized that offloading time-consuming, high-stakes accounting responsibilities could meaningfully reduce strain on CFOs. The data support that view, she said.
The results also raise questions about the evolving role of the CAO. Many CAOs step in as interim CFOs when a finance chief departs, and some move permanently into the role. But Rhodes suspects many see CAO as the peak of their specialty—the firm’s lead accountant—and may not seek the broader, more externally focused CFO position. Future research could examine CAO career paths more closely.
Since the study data is from 2004-2019 and predates the rise of generative AI, I asked Rhodes if she expects technology to reshape the finance function.
Looking ahead, Rhodes says she expects advanced tools to alter the division of labor across finance teams. AI may absorb routine, rules-based tasks in closing, consolidation, and reporting—either reducing the need for traditional delegation or making the CFO–CAO partnership even more strategic, she predicted.
Sheryl Estrada
sheryl.estrada@fortune.com
