CEO turnover higher in UK than in Europe

A study finds that the turnover of CEOs worldwide has risen, and that the UK is above the European average.

by Michael Northcott
Last Updated: 19 Aug 2013

The findings come from Booz & Company’s 12th annual CEO Succession Study, which analyses the world’s 2,500 largest companies. The study found that the UK has the highest turnover of CEOs in Western Europe, at a rate of 14.7% in 2011. The world average was 14.2%. Maybe Brits just like their CEOs less than everyone else… 

All of these figures are a significant increase on 2010, when the average turnover was just 11.6%, suggesting that companies were keener on maintaining stability than implementing radical senior management reshuffles. It’s not as though we haven’t seen some high profile CEO movements at many of the top companies however. Just two weeks ago, Yahoo’s boss was ousted over allegations that he had falsely added a qualification to his CV. Add to that the slew of shareholder rumblings which have seen senior management teams at several companies stripped of their dignity over executive pay, and you have a picture of CEOs being rather unpopular… 

Strangely though, UK CEOs tend to remain in office for longer, at an average of 7.2 years in post, whereas the rest of Europe sees a new one through the door at an average of 6.9 years. The UK has sector specific tastes for changing the name at the top as well: healthcare, telecommunications and services and utilities are the three with the fastest turnover. Is this because these are the busiest industries at CEO level? We don’t know for sure, but even if they’re tough jobs, UK CEOs hang around till they’re older, too. The average CEO leaving office in the UK is 58.4 years old, compared with 56% in all of Europe.  

Deciding how to pick a new CEO for a company is certainly a tricky job, especially when so many companies are simply trying to hold on to their hat in harsh economic circumstances. It’s worth noting that at half a percentage point difference between the UK and the rest of Europe’s average turnovers, the difference is not that great.  

But even if only marginally higher, our turnover figures mean being a CEO in the UK is a tougher gig than en Europe. Although if the Eurozone woes continue to mount, that might have changed by the time Booz conducts this survey next year...

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