Skip to content

24 June, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • long-term stewardship

      Stewardship strategies

      In times of uncertainty and growing risk complexity, boards need to evolve beyond stability. Here...

    • clear cyber risk

      UK companies face a clear cyber risk

      Boards need a laser focus on digital risks—and the UK needs stronger audit, governance and...

    • public markets

      How can we boost public markets?

      Growing companies need adequate liquidity, together with smart regulation and corporate governance that is not...

  • Comment
      • View all
    • clear cyber risk

      UK companies face a clear cyber risk

      Boards need a laser focus on digital risks—and the UK needs stronger audit, governance and...

    • Warren Buffett CEO succession: what boards can learn from Warren Buffett

      The billionaire investor is handing the reins to Greg Abel, after a long, strategic succession...

    • gender pay gap Act now to close the gender pay gap

      This month, it is 55 years since the Equal Pay Act, yet pay inequality persists....

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • UK Corporate Governance Code Board meetings ‘are not up to scratch’

      Nearly three-quarters of board members believe the board’s performance in meetings needs improvement, an expert...

    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • ai boards Corporate world has a ‘huge appetite’ for artificial intelligence

      AI could change boardrooms to the extent that directors’ duties would change too, a panel...

  • Board Careers
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board Advisory & Corporate Services
    • Korn Ferry CHRO 2025 (Copy)

      On The Highwire: Being a CHRO in 2025

      Korn Ferry surveyed 750 senior HR leaders (including 450 CHROs) to understand their key priorities...

    • Boardroom Bellwether CGI 2025 cover

      Boardroom Bellwether 2025

      Boardroom Bellwether is the annual survey by The Chartered Governance Institute UK & Ireland (CGIUKI),...

    • ACCA sustainability reporting 2025 cover

      Sustainability reporting: risk and materiality 2025

      ACCA’s sustainability guide takes a practical approach to helping businesses with sustainability reporting.

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

US companies lead UK and Europe on speed of CEO turnover

by Gavin Hinks on August 3, 2020

Research shows CEO turnover is higher in US firms than those in Europe and the UK, with 28% of US bosses departing after less than 36 months at the helm.

CEO walking towards the exit

Image: Air Images/Shutterstock

When Expedia’s chief executive Mark Okerstrom stepped aside over strategic disagreements in December, it came after just two years in charge.

By leaving after such a brief spell at the top he joined a significant leadership trend: the US beats both the UK and Europe in speed of CEO turnover.

According to new research, US companies are more likely to change their lead executives in under three years than companies in Europe and the UK.

The research, from shareholder advisory firm SquareWell Partners, reveals that 28% of US corporate leaders parted company with their employers in three years or less. European companies are more likely to offer patience to their lead executives: 29% of their departing leaders are in post for nine years or more, while only 8% exit after less than 36 months at the helm. The largest proportion of departing UK leaders served between six and nine years. Average tenure across all territories for a lead executive is a little shy of seven years.

In its report, looking at data for the 18 months to June this year, SquareWell describes the figures as “demonstrating the willingness of US boards to act more quickly in replacing a lead executive”.

Activist pressure

Why US companies wave goodbye to problematic CEOs early is difficult to pin down because of the lack of evidence, according to Luca Giacalone, senior ESG analyst at SquareWell.

Recent commentary from academics at business school INSEAD, looking at leaders during the coronavirus crisis, says many chief executives overestimate their ability to cope with stress. Other commentaries focus on many leaders lacking “resilience” because they and their boards focus on short-term gains at the expense of long-term thinking.

That said, Giacalone notes that US corporates may face much more attention from activist investors. “As such, where there is an underperformance by the CEO, the board may be willing to let him/her go to avoid an activist approach,” he says.

The report also reveals that boards in all territories may be reluctant to air, or revisit, their dirty washing in public. Just 7% of moves are disclosed as formal “dismissals”, though SquareWell says its own analysis finds that 29% could be said to stem from poor performance, a scandal or strategic disagreement. According to disclosures, the most common reason for departure is “resignation”.

The period was notable for a clutch of uncomfortable departures for high-profile leaders. Steve Easterbrook, former CEO at McDonald’s Corporation, left the fast food chain after the board concluded he had “violated company policy and demonstrated poor judgment” over a relationship with a colleague. Birgitte Bonnesen, Swedbank’s one-time chief executive, moved on following a money laundering scandal and Jeff Fairburn, once CEO at housebuilder Persimmon, departed after heavy criticism of his remuneration.

Plans and processes

When choosing replacements, boards and nominations committees tend to opt for candidates with no previous experience as lead executive. Only 12% of those appointed had once held the top job, with examples including BT’s Philip Jansen, ABB’s Björn Rosengren and Wells Fargo’s Charles Scharf.

Once again, evidence explaining this trend is in short supply, though Giacalone suggests one reason may be the legal and economic costs associated with hiring an outsider.

While CFOs were the most popular choice for interim roles, only 9% made it into the top job. Divisional or regional heads were most likely to be elevated at 38%.

Companies also appear uncomfortable disclosing their succession plans or appointment processes. Though two-thirds of all new appointments were internal, and only 10% were women, SquareWell found 81% of the companies they examined had “weak or no disclosures” for their succession arrangements.

An even larger 85% provided poor disclosure for their appointments procedure. SquareWell’s report says: “Strong disclosure should provide insight as to whether the board considered both internal and external candidates as well as give insight as to what type of profiles were sought.”

Succession planning, Giacalone says, has always been a sensitive topic, “traditionally surrounded in secrecy”. There are obvious market reasons why. However, the absence of disclosure may be for other reasons, such as not having a plan.

“In this respect, companies should be mindful that their disclosure on succession planning should aim for clarity—rather than providing a detailed overview of the state of succession planning,” Giacalone adds.

That’s sound advice. With so much at stake, chief executive appointments will always be tricky, even controversial. Now we know a little bit more about what’s happening behind the scenes.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Most CEO 'resignations' may actually be terminations
    April 25, 2022
    CEO leaving office after resignation

    Retired, resigned or left the company? A Stanford study suggests more chief executives are pushed out by boards than previously assumed.

  • Succession planning can calm the market
    October 20, 2022
    CEO succession

    When a good CEO announces their departure, revealing a succession plan eases the pain in more ways than one, finds research.

  • Steps for a smooth and successful CEO transition
    January 18, 2022
    New CEO sitting in his office

    A succession plan is only the start: an effective CEO transition requires clear KPIs, objective assessment and ongoing board support.

  • Watchdog highlights companies' lack of progress on C-suite succession planning
    December 1, 2021
    CEO on top wooden block, with no one on the other blocks

    The UK financial regulator wants to see greater cohesion between succession planning, diversity commitment and board evaluations.

Search


Follow Us

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board Advisory & Corporate Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap