CEO turnover hit a global record high of 17% in 2018, according to a recent study by Strategy&, PwC’s strategy consulting business. The study analysed CEO successions at the world’s largest 2,500 public companies over the past 19 years.
2018 also showed a rise in the share of CEOs who were forced out of their positions for ethical lapses. In fact, more CEOs (39%) were forced out for ethical lapses rather than financial performance or board struggles, a first in the study’s history. This number rose by half as compared to 26% in 2017.
James Chang, PwC China Consulting Leader, said “The most important force in preventing misconduct and withstanding regulatory scrutiny is a company’s corporate culture. An effective corporate culture not only has the company’s values clearly defined and demonstrated by behaviours but ensures that every employee understands and adheres to the organisation’s process and controls to maintain compliance and integrity.”
Geographically, CEO turnover rose in every region in 2018 except China (7%). Among industries, turnover was highest in communication services companies (24.5%), followed by materials (22.3%) and energy (19.7%). Healthcare saw the lowest rate of CEO turnover in 2018 (11.6%).
The share of incoming women CEOs was 4.9% down slightly from the record high of 6% in 2017. However, the trend has been upward since the low point of only 1% in 2008.
Paul Arkwright
Publisher
