CFO Resignations and Push-Outs: A Pivotal Moment for Messaging

Turnover at the CFO level creates a groundswell of disruption and uncertainty in the markets. A departure is often seen as a top risk and that can have a huge impact on everything from short-term share price to future capital raises. Within hours of receiving a CFO’s resignation or firing, management and the board of directors must create a content framework for positioning and key messages. For the news to be seen in a positive light, it’s not enough to just dispatch the information without thinking through all the implications. Material information, such as key staff departures must always be positioned for the current market environment—with a keen awareness of perception.

For those of us who smile at “L to the OG,” the HBO show Succession does a good job of showing how to botch messaging when releasing significant material news. In Waystar’s case, if Logan Roy, founder and CEO dies, the market firmly believes the company will not be as successful and therefore, the stock is worthless (spoiler alert for those who haven’t watched the show yet: the stock tanks when the market learns he suffered a stroke).

The lesson here is if the market perceives the CFO as invaluable, you better position the news in a way that meets the market’s needs. This requires investor relations to actively engage in online and offline listening to understand the concerns of the market so you can effectively craft a message with both intentional and implied meaning.

If there is not a replacement available to step up, communicate to the markets that an active search is in progress and multiple candidates have already been identified to lead the company's future growth. In case the search may take longer for strategic reasons, name a qualified interim CFO and indicate that you are being careful in your search efforts to ensure the right match is made to meet both immediate and longer-term priorities.

The truth is, messaging at pivotal moments in a company’s journey is a balancing act. But as Succession has taught us, having a communication plan to respond to C-suite shake-ups, is essential. Successful investor relations strategies demand a well-conceived comms strategy, along with professional guidance, and ear to the ground. Literature

So, in the immortal words of bumbling cousin Greg, “if it is to be said, so it be, so it is.”