This report tracks 500 companies based on their inclusion within the main stock indexes in Europe (284 companies), the UK (100 companies) and the US (100 companies) to gather insights on Lead Executive changes. The analysis reveals:
- Nearly a quarter of the world’s largest companies experienced a change in its Lead Executive since January 2019.
- 16% of companies that appointed a new Lead Executive in 2020 relied on an Interim CEO as part of the transition.
- CFOs are the most prevalent choice to take over the company during a Lead Executive change.
- Companies are increasingly looking outside the organisation when appointing a new Lead Executive. Externally recruited Lead Executives increased from 28% in 2019 to 43% in 2020.
- 55% of the companies that dismissed their Lead Executive appointed an external candidate, suggesting a motivation to bring on board a fresh perspective.
- The quality of succession planning disclosure remains low but there is progress.
- The progress in appointing women to Lead Executive positions remains slow. Over the two years under review, women represented only 11% of all new Lead Executives appointed.
Over the past 10 years, there has been a significant shift in the drivers of CEO attrition. The trend complicates the role of CEOs and represents downside risk to shareholder returns, and so merits the urgent attention of both CEOs and boards.
This article suggests that involuntary, non-financial CEO departures often carry dire consequences for a company’s share price; and offers insight into the trends, consequences, causes and solutions.
This article explores how new CEOs can avoid key traps during their transition into the role including:
- Failing to diagnose the execution weaknesses of their businesses.
- Making decisions about their teams too quickly.
- Neglecting relationships with the execution side of the business.
- Failing to develop a coherent, efficient strategy deployment process while maintaining execution excellence.
A plan for balancing strategy and execution during the first 180 days in-role is also provided.