The CFO Succession Crisis: Why Australia Is Running Out of Finance Leaders Ready for the Top Job

Oct 13, 2026 By Peter Morgan

Lean teams, delayed promotions and rising AI expectations have created a widening capability gap between Financial Controller and CFO.

Australia is not short of accountants. It is short of finance leaders who are ready for the top job.

Across Sydney and the wider Australian market, boards and CEOs are discovering the same thing at the same moment. When the CFO resigns, retires or is promoted, the person sitting one level below is often technically excellent and commercially under-prepared.

The Financial Controller or Head of Finance can close the books, manage the audit, run the budget and hold the business to its numbers. What they have rarely been given is the exposure that now defines the CFO role: capital allocation, transformation, technology, investor and board engagement, and the judgement to make decisions where the return is uncertain.

This is not a talent problem. It is a development problem, and it has been building for more than a decade.

How lean finance teams broke the traditional pathway

For a long time the pathway to CFO was reasonably predictable. A strong accountant became Financial Controller, then Head of Finance or Divisional CFO, then Group CFO. Along the way they were given a portfolio of experiences: a system implementation, an acquisition, a refinancing, a turnaround, a few years presenting to the board.

That pathway depended on finance teams having enough depth to give people room to grow.

Years of cost pressure changed that. Finance functions were flattened and consolidated. Shared service centres and offshore teams absorbed transactional work. Middle layers disappeared. The remaining senior people carried wider spans of control with less support beneath them.

The consequence is that the Financial Controller of 2026 is often doing the job that two or three people did previously. There is little slack for a stretch assignment, a secondment or a seat in the room when strategy is decided.

EY’s 2026 Global DNA of the CFO Survey of 1,610 CFOs, Finance Directors and Heads of Finance found that 47 per cent of finance leaders’ capacity is still devoted to operational tasks such as regulation, reporting, internal controls and core finance processes. Just 11 per cent describe their teams as highly adaptable, and only 13 per cent say their teams take a proactive approach to continuous learning.

A team that is running at capacity on compliance and reporting is not a team that is building its next CFO.

Delayed promotions and the missing middle

The second pressure is time.

Many Australian CFOs stayed in their roles longer through the uncertainty of recent years. Boards valued stability. Transactions slowed. Fewer new CFO seats were created, and fewer internal promotions followed.

For the senior finance professional below the CFO, that meant waiting. A capable Financial Controller who expected to step up at 38 may still be waiting at 44. Some have left for a CFO title at a smaller business. Others have stayed, grown more specialised and quietly narrowed their range.

Meanwhile the pipeline beneath them is thinning. Research commissioned by Chartered Accountants Australia and New Zealand from Oxford Economics Australia projects a shortfall of 17,900 accounting, audit and finance professionals by 2035. Accounting course completions have fallen 61 per cent since 2018, domestic enrolments remain below half their 2018 peak, and an estimated 108,000 people are expected to leave the profession over the coming decade.

The professional bodies have pointed to the same structural shift. CPA Australia, CA ANZ and the major accounting firms jointly estimated a conservative gap of almost 30,000 missing accountants over five years, driven by fewer domestic students, retirements and career changes.

It is important to be precise about where the shortage sits. CA ANZ’s 2026 survey for the Jobs and Skills Australia Occupation Shortage List found that Finance Manager vacancies were filled 85 per cent of the time and in an average of 32 days, while external auditor and general accountant vacancies were filled only around half the time.

In other words, Australia can still find a Finance Manager. What it is struggling to produce is the next tier up: the finance leader who has been prepared, deliberately and early, for a role that has changed beneath them.

The CFO role has changed faster than the people below it

If the CFO role were the same job it was in 2012, the gap would be manageable. It is not the same job.

Boards now expect the CFO to be a strategist, an operator and a technologist at once. McKinsey’s 2025 pulse survey of 150 finance leaders across 26 countries found that 52 per cent of CFOs had spent the largest share of their time over the past year on transformations, either of the finance function or of the wider organisation. In McKinsey’s earlier survey, 60 per cent of CFOs named strategic planning as a top finance priority, up from 38 per cent only a year before.

Deloitte’s quarterly CFO Signals research tells the same story. Half of the CFOs surveyed named digital transformation of finance as their top priority for 2026, 87 per cent expect AI to be extremely or very important to their finance function’s operations, and 54 per cent plan to integrate AI agents into finance as a transformation priority. In Deloitte’s Japanese CFO survey, the competencies that recorded the largest increase in importance were innovation capability and digital and technology acumen.

The EY research adds a telling detail about the gap between ambition and reality. Sixty per cent of CFOs believe they should define and shape how the business creates value, yet only 25 per cent lead investment decisions where the return is uncertain, indirect or long term, and only 26 per cent lead discussions on which value drivers matter most. Only 27 per cent of respondents said finance is perceived as a strategic partner across their business.

If sitting CFOs are still working to earn that seat, the Financial Controller beneath them has usually had even less exposure to it.

Why technical strength is no longer enough

None of this diminishes technical accounting. A CFO who cannot interrogate the balance sheet, challenge an impairment assumption or manage a difficult audit will not last.

Technical strength, however, has become the entry ticket rather than the differentiator. The capabilities that now separate a ready CFO from a strong Financial Controller include:

Capital allocation. Making and defending decisions about where the business invests, divests and borrows, often with incomplete information.
Transformation leadership. Owning an ERP, finance system or operating model change end to end, including the people side.
Data and AI fluency. Understanding what AI can and cannot do inside finance, how to govern it, and how to use data to shape commercial decisions rather than report on them afterwards.
Board and investor engagement. Presenting with authority, handling challenge, and translating financial outcomes into strategic choices.
Enterprise leadership. Influencing operations, sales, technology and people functions without direct authority.
Judgement under uncertainty. Operating when geopolitical, regulatory or market conditions change faster than the forecast cycle.

The EY research found that 68 per cent of CFOs believe they must develop new skills and leadership styles to remain effective rather than relying on past experience, and 67 per cent say they should be actively challenged to move out of their comfort zones into digital, strategic and people leadership.

That is a remarkable admission from people who already hold the role. It explains why boards are increasingly cautious about promoting someone whose experience is almost entirely in control and reporting.

The AI expectation gap

AI deserves specific attention because it has changed what boards ask of the CFO in a very short time.

The Australian Institute of Company Directors’ Director Sentiment Index for the first half of 2026, based on 828 directors, found that more than half of directors believe the pace of AI adoption is faster than their organisation can keep up with. More than four in five expect digital and AI implementation to increase in the next twelve months, and around 60 per cent of boards are developing skills and expertise in these areas.

Boards are therefore looking to the CFO for two things that rarely appeared in a Financial Controller’s job description five years ago: a credible view on where AI creates value in the business, and a governance framework for the cost, risk and data quality issues that come with it.

Deloitte’s second quarter 2026 CFO Signals research found that 59 per cent of CFOs see balancing pressure to deploy AI quickly against the need to manage risk as their main governance challenge, and 19 per cent of CFOs already identify themselves as the owner of enterprise AI governance.

Yet EY found that only 21 per cent of CFOs describe their finance function’s AI preparedness as advanced or leading. Only 37 per cent participate in reverse mentoring with junior team members, which is one of the most practical ways a senior finance leader can build technology fluency quickly.

The AI expectation has arrived at the board table before the capability has arrived in the finance team. For succession, that gap is now a decisive factor.

Are employers developing successors early enough?

In most Australian businesses, the honest answer is no.

CPA Australia’s INTHEBLACK has reported research indicating that 97 per cent of Australian and New Zealand organisations have difficulty finding candidates for senior roles, and that more than half of them link that difficulty to a lack of clear succession planning.

The pattern Byron Thomas Recruitment sees in the market is consistent with this. Succession for the CFO role is often discussed only when the incumbent resigns. At that point the board has a choice between an internal candidate who has not been tested on the parts of the role that matter most, and an external search under time pressure.

The governance community has started to call this out. APRA has observed that board succession planning is frequently not integrated with skills matrices, capability gap analysis and performance review outcomes. The AICD now encourages boards to treat succession as an always-on system rather than a plan that is pulled out when a vacancy appears.

The same discipline should apply to the CFO. A board that reviews the audit committee’s skills matrix each year should also know, each year, whether the business has a credible CFO successor and what specific experiences that person still needs.

When internal succession works

Internal succession remains the best outcome when it has been prepared properly. The internal candidate knows the business, the systems, the people and the risks. Continuity is valuable, particularly through a refinancing, a transaction or a difficult trading period.

In our experience internal succession works when four conditions are in place:

The successor was identified at least two to three years before the transition. That provides time to build a deliberate experience portfolio rather than hoping exposure happens naturally.
The successor has owned something enterprise-wide. A system implementation, an integration, a pricing project or a cost program with visible accountability outside finance.
The successor has been in the room. Regular board, audit committee and investor exposure, not a once-a-year presentation.
The incumbent CFO is genuinely invested. EY’s recommendations are explicit here: build structured leadership pipelines, assign emerging leaders to transformation initiatives and strengthen succession planning as part of the CFO’s own job.

Where those conditions exist, the Financial Controller who steps up is often the strongest CFO the business could have appointed.

When an external search is warranted

An external search is the right decision when the business needs something the internal pipeline was never positioned to provide.

Typical triggers include:

the business is entering a phase that the internal candidate has never operated in, such as an IPO, a major acquisition, private equity ownership or significant international expansion
the finance function itself needs to be rebuilt or modernised, and the internal candidate has grown up inside the current model
the board wants a CFO with credible CEO succession potential and the internal candidate is not yet at that level
the successor has been promised the role for too long without being developed, and the gap has become visible to the board
there is no internal candidate at all because the team was run too lean for too long

Even then, the most useful search is not a rushed replacement. A well-run external process benchmarks the internal candidate honestly, maps the realistic market for the role, tests remuneration assumptions and often confirms whether a Financial Controller with the right support could in fact succeed. Sometimes the answer is an external appointment. Sometimes it is an external CFO for the next phase with a clear plan to develop the internal candidate for the one after.

Boards that engage a specialist executive search partner before a vacancy, rather than after it, tend to make calmer and better decisions. The AICD’s own guidance on board succession makes the same point: proactive boards map the market and meet candidates before a vacancy exists so that the eventual process is faster and better informed.

A practical CFO readiness framework

The following framework is the one Byron Thomas Recruitment uses when advising boards and CEOs on CFO succession, and when working with senior finance professionals preparing for the step up. It is deliberately practical.

For employers and boards

Define the future CFO profile now. Describe the CFO the business will need in three years, not the one it has today. Include AI, data, transformation and capital allocation explicitly.
Assess internal candidates against that profile, honestly. Technical excellence and loyalty are necessary. They are not evidence of readiness for the parts of the role the candidate has never performed.
Build an experience portfolio, not a training plan. Give the successor ownership of a transformation, a transaction workstream or an AI initiative with real accountability.
Put them in front of the board. Rotate audit committee presentations. Involve them in investor preparation. Let directors form their own view over time.
Protect capacity. A successor who is already doing two jobs cannot develop. Backfill or restructure so the stretch is real.
Review succession annually at board level. Treat it as a standing governance item alongside the skills matrix, not a reaction to a resignation.
Benchmark externally before you need to. Understand the market for the role, including remuneration, so that an internal promotion or an external search is a considered choice rather than a forced one.

For Financial Controllers and Heads of Finance

Audit your own exposure. List the last three years of work. If it is almost entirely control, reporting and compliance, that is the gap to close.
Volunteer for the enterprise-wide problem. The system implementation nobody wants, the pricing review, the integration. Ownership outside finance is what boards remember.
Learn capital allocation by doing it. Ask to lead the business case, the post-investment review or the capital planning cycle, not only the budget.
Become fluent in AI and data, practically. Pilot a use case inside your own team, learn how to govern it, and be able to explain to a director what it does and where the risk sits.
Seek board exposure deliberately. Ask to present a section of the audit committee pack. Prepare for challenge, not only for accuracy.
Build commercial relationships. Spend time with operations, sales and technology leaders. The CFO role is an enterprise role.
Get honest feedback. Ask your CFO, a director or a trusted adviser what would stop them appointing you today, then work on exactly that.

The cost of waiting

Boards sometimes treat CFO succession as a problem to be solved when the time comes. The market no longer allows that.

The pipeline is thinner, the role is broader, and the AI and transformation expectations are rising faster than most finance teams can develop against them. A business that waits for the resignation letter will either promote someone before they are ready or search under pressure in a market where the number of genuinely ready CFOs is limited.

The alternative is not complicated. Decide what the next CFO must be able to do. Identify who could get there. Give them the experiences that count, early enough to matter. Benchmark the market before a vacancy forces the decision.

Australia has the raw talent. The task now is to develop it before the top job falls vacant.

Planning CFO succession or a senior finance appointment?

Byron Thomas Recruitment advises boards, CEOs and finance leaders on CFO succession, internal candidate benchmarking and confidential executive search across Australia and New Zealand.

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Sources

CFO succession planningCFO recruitment Australiafinance leadershipfinancial controller to CFOexecutive search Australiafinance talent pipelineAI in financeboard governance

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