CFOs Who Delegate Accounting Duties Stay Longer and Reach CEO Role More Often, Study Finds

CFOs Who Delegate Accounting Duties Stay Longer and Reach CEO Role More Often, Study Finds

Finance chiefs who hand off financial reporting to a dedicated chief accounting officer extend their tenure by nearly 20% and significantly improve their odds of becoming CEO, according to new research that challenges conventional wisdom about executive career paths.

The finding, published Monday in Management Science, suggests that how CFOs structure their leadership teams may be as consequential as their technical skills. For finance leaders navigating record turnover and expanding job demands, the decision to delegate isn't just operational—it's strategic.

"A chief financial officer who aspires to be a CEO needs experience in strategy and investor-facing tasks," said Adrienne Rhodes, an assistant professor of accounting at the University of Iowa's Tippie College of Business and co-author of the study. "Delegating financial reporting frees CFOs to focus on enterprise leadership skills that boards expect in CEO candidates."

The research, titled "Delegation and Chief Financial Officer Retention: Evidence from Chief Accounting Officers on the Executive Team," analyzed S&P 1500 firms from 2004 to 2019, deliberately stopping before the pandemic to avoid COVID-era distortions. Rhodes and her colleagues tracked voluntary CFO departures and identified when a CAO served on the executive team, developing a methodology to distinguish voluntary exits from forced departures.

The results were striking: firms with a CAO clearly responsible for financial reporting are approximately 19% less likely to lose their CFO, after controlling for other factors. More notably, CFOs who delegate to executive-level CAOs are less likely to make lateral moves to other CFO positions and more likely to advance to the CEO role.

The findings arrive as finance chiefs face mounting pressure. Record CFO turnover has been driven in part by 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, Rhodes said in a Monday interview, support that view. By shifting day-to-day financial reporting to a CAO, finance chiefs free up bandwidth for the strategic and investor-facing work that distinguishes CEO candidates from technical specialists.

The research raises questions about how companies structure their finance organizations and whether the traditional CFO role—combining both accounting oversight and strategic leadership—remains sustainable as job demands intensify.