SOX Center

Shareholders and board members should prepare for record turnover among Chief Financial Officers (CFOs) in 2007, according to a new survey from executive services firm Tatum, LLC. Data from the survey suggests that compliance headaches such as Sarbanes-Oxley requirements and unrealistic demands from board members and CEOs will drive more than 2,300 CFOs from their positions in 2007.

We are approaching an inflection point in the office of the CFO, and corporate America may soon find that creating shareholder value is impossible with what is quickly becoming an itinerant CFO,” said Richard D’Amaro, Tatum Chairman and CEO. “Many CFOs are fired or resign not because they weren’t a good match for the company when they were hired 20 months ago, but rather because the business has evolved so quickly that their capacity and capabilities are no longer an ideal match for the company.”

A record 2,302 CFOs left their positions in 2006, according to independent research firm Liberum Research. A survey of more than 150 Tatum partners in the firm’s Executive Practice last month indicates that 93 percent believe CFO turnover in 2007 will be as high or higher than 2006. Only seven percent of the respondents expect to see fewer CFO departures in 2007.

Morningstar: New Survey Predicts 2007 Will Set Record for CFO Turnover

Sen. John Kerry (D-Mass.) has introduced legislation to ease the concerns small companies have about the cost of complying with section 404 of the Sarbanes-Oxley Act. But amid Congress’s month-long break until the Nov. 7 elections, followed by a year-end, lame-duck session, the bill isn’t expected to go anywhere or get much attention.

None of the sources CFO.com contacted — many of them small business executives — had heard of the legislation, which the former presidential candidate introduced in the Senate nearly two weeks ago. It was referred to the Committee on Small Business and Entrepreneurship.

Called the Small Business Sarbanes-Oxley Assistance Act of 2006 (S. 3919), the legislation would help companies comply with Sarbox in two ways: the Small Business Administration would award $5 million annually in federal grants to small businesses, and a task force would periodically report to Congress how to help companies comply with the 2002 law. The task force, assembled by the SBA’s chief counsel for advocacy, would include Securities and Exchange representatives.

CFO.com: Kerry’s Sarbox Relief Bill Not Enough