CFOs are quitting Indian firms before finishing 2 years

Nearly seven in ten chief financial officers (CFOs) in India leave their roles within 24 months, making finance leadership one of the most unstable positions in corporate India. Once considered a steady role, the CFO job is now marked by high churn, with mandate misalignment emerging as the top trigger for exits, according to data from leadership advisory firm Ishwa Consulting. The findings, shared with TOI, tracked the tenures of 300 CFOs across listed and unlisted firms since 2020.

The report shows that 48% of CFO exits stem from misaligned mandates, where the responsibilities of the role evolved after hiring or decision rights were left unclear. Around 31% of CFOs left to pursue other career opportunities, while only 20% exited because of performance issues. “The churn isn't about cost or capability; it's about misaligned mandates and shifting expectations,” said Arvind Pandit, founder and managing partner at Ishwa Consulting.

The data also highlights sector-specific patterns. CFOs in infrastructure and manufacturing companies typically have longer stints, averaging over four years. In contrast, sectors such as consumer businesses, fintech, and technology experience far higher churn rates. One in four CFO exits across India Inc takes place within the first year. “Startups run on a treadmill,” said Balakrishnan V, chairman of Exfinity Ventures and former CFO of Infosys. “CEOs are chasing capital and valuations while CFOs are grounded in operational reality. That friction is natural and explains why churn is far higher in younger companies, while established firms tend to see steadier partnerships between CEOs and CFOs.”

IPO-related hiring has added to the volatility. Several large companies have experienced high-profile CFO departures in recent years, including listed firms such as Adani Green, Dilip Buildcon and DLF, as well as unlisted companies like Arvind Smartspaces, Axis Bank, Byju's, and Unacademy. Ishwa’s data indicates that 15-20% of CFOs were hired to prepare companies for stock market listings, but nearly 60% of these hires left after IPO plans were either delayed or abandoned.

Founders and boards often reassess such hires because the profile of an IPO-ready CFO comes at a high cost. These finance leaders are typically well-connected in the banking sector and skilled at communicating with investors on equal footing with founders. “You see this in leaders like Zomato's Akshant Goyal, Swiggy's Rahul Bothra, and Meesho's Dhiresh Bansal,” said the founder of a late-stage company. “In early stages, CFOs focus on compliance and controls. But once a company prepares for the public markets, the role demands a very different skill set. If IPO timelines shift, boards are forced to revisit whether that investment still makes sense.”

Retention of CFOs depends not just on market cycles but also on how companies hire and integrate their finance heads. Ishwa’s data shows that CFOs promoted internally stay for a median of five years, compared with just 1.7 years for external hires. Onboarding quality also plays a major role. CFOs who rated their onboarding experience as 'good' stayed for an average of 5.2 years, while those who described it as poor lasted just 1.6 years.

“What retains a CFO isn't just pay,” said Balakrishnan. “It's autonomy, clarity in decision rights, and the ability to deliver without being second-guessed. Legacy matters more than compensation.”

When CFOs do leave, their career paths often move upward. About 40% join larger companies, 30% take up CFO roles at other startups, around 20% transition to private equity-backed firms, and 11% become CEOs. This indicates that the finance function is increasingly serving as a launchpad for broader leadership positions.

(with ToI inputs)