31st May 2023 14:19
(Alliance News) - Prudential PLC became the latest FTSE 100 company to change its chief financial officer on Wednesday, after James Turner stepped down as he "fell short" of the company's "high standards."
"The number of planned changes in CFO this year is well above the post-2000 average of 15 and is also the second-highest since 2000, with only the Covid-hit year of 2020 having a greater impact," said AJ Bell investment director Russ Mould.
"Turner's immediate departure means that seventeen changes of CFO have already come into effect, with nine more announced, six of which have been scheduled for this year. The other three – at DS Smith, JD Sports and Unilever – have a less well-defined timeline, with Graeme Pitkethly's term at Unilever running until the May 2024 annual general meeting at the latest."
Mould said that the average tenure of FTSE 100 CFOs is now down to 4.1 years.
But, despite the terms being more short lived, there are some positives with diversity. Mould noted that nine of 2023's changes welcome a female CFO. The number of female CFOs in the FTSE 100 now stands at 24, with an average term to date of 2.1 years.
Turner's departure from FTSE 100 Prudential has sparked a particular interest, due to the reasons of his exit.
The London-based, Asia-focused insurer said Turner's resignation relates to a code of conduct probe in regard to "a recent recruitment situation", but did not disclose further details.
"Whatever lay behind the sudden dismissal of Prudential’s chief financial officer James Turner, a breach of conduct rules is an unusual reason for someone to leave such a position, even in a year when no fewer than 26 changes in CFO have already been announced by FTSE 100 firms," said AJ Bell investment director Russ Mould.
"Shareholder pressure on the board after poor operational or share price performance, retirement, getting (or missing out on) the job of chief executive, the promotion of a predecessor to the top job, the appointment of an interim CFO after a sudden change or the desire for a fresh challenge are all much more common."
Turner will be replaced by Ben Bulmer, the current CFO for the Insurance & Asset Management division. Bulmer, who will be based in Hong Kong, has served in several leadership roles at Prudential since joining in 1997.
Turner will remain available to the group for the next four months to "support a smooth transition".
News of Turner's resignation comes after he stepped down from the board in January, but remained as CFO. Prudential had explained that "it is the practice of many of the boards of Asia-listed companies not to have chief financial officers as board members or executive directors".
UBS said that the change "may provide near term uncertainty."
"We expect a negative share price reaction," UBS added.
Shares in Prudential were down 4.1% at 1,079.00 pence each in London on Wednesday morning. This pushed the company to the bottom of the FTSE 100 index.
Since the start of 2023, the stock has lost 8.3%. Over the past 12-months shares are down 4.0%.
However, Prudential reassured investors that the change will have no implications for the financial performance, reporting or operations of the business.
"Our code of conduct sets out that we expect all our colleagues to adhere to the highest professional standards and behaviours. On behalf of the board, I would like to extend our gratitude to James for his twelve years of contribution to the business and wish him well for the future," said Chief Executive Officer Anil Wadhwani.
By Sophie Rose, Alliance News reporter
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