2006: The era of the inclusive leader

The 2006 study showed that total turnover fell to 14.4 percent, slightly lower than the 2005 total. The study also examined the era of the inclusive chief executive officer — a very different species from the “imperial” CEOs who had roamed the corporate landscape not so long before. The study found boards of directors becoming more critical: they are more closely involved in setting strategy, and far more likely to insist that CEOs deliver acceptable shareholder returns and demonstrate ethical conduct. Indeed, the data indicated that boards were increasingly prepared to replace CEOs in anticipation of disappointing future performance, instead of merely as punishment for poor past performance. To succeed in this new era, CEOs needed to embrace and reflect the concerns of board members, investors, employees, the government and other constituencies. Those who ignored these new rules did so at their peril. Annual turnover of CEOs across the globe increased by 59 percent between 1995 and 2006. In those same years, forced turnover — cases in which CEOs were fired or pushed out — increased by 318 percent.

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As turnover levels off, our annual CEO succession study shows chief executives and their boards adopting new survival strategies.read more on strategy+business >


Past studies