How CEOs can avoid being fired
Scandal. Exhaustion. Incompetence. Boardroom backstabbing. Or maybe just bad luck. There is a growing list of reasons for the increasingly rapid departures of CEOs. How can you spot the warning signs, and what do you do if you've suffered the chop?
It’s tough to get to the top and it’s getting even tougher to stay there. In 1984, 35% of CEOs had been in the job for at least a decade but by 2009 the average tenure at the world’s biggest corporations had dropped to around six years, with only 19% in the post for 10 years or more. A 2018 PwC study showed that CEO turnover hit a record high of 17% that year, with more leaders forced out for ethical lapses (39%) than any other reason, including financial performance or board struggles – a first in the study’s history.
“CEOs are in the public spotlight more than ever,” says Daniel Schauber, founder of Exechange, which tracks executive changes and determines their ‘Push-out Score’ – a measure of pressure on departing CEOs that gauges if they were forced out or departed voluntarily. According to the Push-Out Score analysis model, between 2017 and 2021 half of 1,093 departing CEOs in the US stepped down under strong pressure.
“Being forced out or fired is perfectly normal for a CEO,” Schauber says.“At the same time, CEOs are usually keen to protect their own reputation as much as possible when they are forced to leave. As a result, they usually prefer to leave quietly and avoid a very public firing.”