American CEOs have more job security than they’ve had in years. But when the top dog’s out, he’s more likely to have been showed the door.
Those are the key conclusion of Booz & Company’s annual analysis of CEO turnover. The study looked at the 2,500 largest publicly traded companies in the world, where they found 361 successions in 2008
Of the 127 chiefs who got the axe in 2008, a high 35% of the total departing, poor financial performance, ethical lapses or “irreconcilable differences” were to blame. Japanese companies were four times as likely to give their top man the hook this year as last. Financial services and energy firms had record turnover too.
For those choosing their successors, conservative is clearly the notion of the day.
More American CEOs are being set up as “apprentice” to their predecessor — CEO while the last guy remains Chairman.
Incoming CEOs are twice as likely to have served in the top job before (19% of the class of 2008 are veterans.)
And they’re older too, 52.9 years old on average, compared to the long-running average of 51.
In battering down the hatches, boards have once again chosen the familiar over the inevitable future: few of the new CEOs were women (just 4) and not many were multicultural, either.
So is that instinct to go with the familiar prudent or just safe? Wise or a missed opportunity?
How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.