Booz Allen Hamilton Reports on CEO Turnover
The highlights of Booz Allen’s study CEO Succession in 2006 (available June 1 in Strategy+Business) are 1) merger related CEO changes provide a substantial boost to stock prices and 2) “from 1995 to 2006 annual CEO turnover has grown 59%; in that same period, performance-related turnover increased by 318%. In 1995, one in eight departing CEOs was forced from office - in 2006, nearly one in three left involunarily.”
Booz Allen examined nine years of CEO succession data, and identified two fundamental shifts in the ways corporate boards address CEO selection and oversight: They are becoming less tolerant of poor performance, and they are increasingly splitting the roles of CEO and chairman and recruiting chairmen who have not previously served as a company’s CEO. “It’s clearly time to say goodbye to the age of the imperial CEO,” said Steven Wheeler, Senior Vice President at Booz Allen. “Welcome to the era of the inclusive CEO, who embraces and reflects the concerns of board members, investors and other constituencies.”
This report was covered by the New York Times and the International Herald Tribune.
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