With a stable global economy buoying bottom lines of 2019, a total of 1,640 CEOs departed US businesses. This was the highest turnover ever recorded by global outplacement and executive coaching firm Challenger, Gray & Christmas since it started tracking CEO turnover in 2002.
The lingering impact of the #MeToo movement meant CEOs were increasingly held to a higher ethical standard last year. In November, McDonald’s CEO Steve Easterbrook was forced to step down after admitting to a consensual relationship with an employee, but most departures weren’t so dramatic.
“Many CEOs (395) retired from their positions after a long tenure, leaving the company in relatively good shape,” says Andrew Challenger, SVP of Challenger, Gray & Christmas. “Others left because their skills were in demand and they were offered new opportunities (154). And more found that advances in technology and shifts in consumer behaviour called for new leadership.”
The trend of high CEO turnover is not limited to the US. “Before COVID-19, CEO tenure in the top 50 ASX-listed companies had continued on a downward trend since 2003,” says veteran PR advisor John Connolly who has counselled companies in the US, Canada, UK and Australia. “In 2003, it was 8.5 years, and today it is only 3.7 years. The pressure on a CEO has definitely become more intense in recent years. I think there’s now a climate of outrage, and that outrage needs an answer. The answer has been, in a lot of cases, to fire the CEO.”
This story is from the August 2020 edition of The CEO Magazine - ANZ.
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This story is from the August 2020 edition of The CEO Magazine - ANZ.
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