UK leads rise in CEO departures

Chief govt departures from firms in main equities indices rose sharply final 12 months, led by excessive turnover at UK-listed firms the place exits from the highest greater than doubled.

In keeping with analysis by Russell Reynolds Associates, 175 chief executives stepped down the world over’s high public firms in 2022, up from 133 the earlier 12 months and a five-year excessive.

London-listed firms accounted for one in 5 departures, the analysis discovered, with 38 FTSE 350 chief executives stepping down in 2022, greater than double the 18 exits of the earlier 12 months.

“UK firms have skilled a turbulent few years, with the economic system recovering extra slowly from the pandemic than others within the G7 and the nation having confronted extra challenges from provide chain points created by Brexit,” stated Luke Meynell, managing director at Russell Reynolds Associates.

Management adjustments within the US and Australia additionally contributed to the worldwide pattern, with an increase in CEO turnover in each the S&P 500 and ASX 200.

The acceleration comes after bosses led companies by way of challenges together with the Covid-19 pandemic and the conflict in Ukraine, prompting some to remain of their roles for longer than they’d anticipated in an effort to make sure stability.

“This bottleneck is now damaged broad open, and a lot of CEOs are stepping down, following three years of power burnout,” stated the researchers.

Throughout the UK, the variety of chief govt departures amongst FTSE 100 firms rose 63 per cent to 13, whereas exits amongst mid-cap FTSE 250 firms have been up 150 per cent to 25.

In Europe, the ten chief govt departures at Euronext 100 firms final 12 months marked a 50 per cent fall from the earlier 12 months. There have been 22 such exits amongst Japan’s Nikkei 225 firms, two lower than in 2021.

Healthcare and prescribed drugs firms skilled the largest leap in management change final 12 months, with an virtually threefold rise to 14 departures as firms appeared to safe pandemic-related successes and react to supply-chain pressures.

Eight chief executives have already left their jobs at UK-listed firms within the first three months of the 12 months, the analysis discovered, barely up on the seven departures recorded over the identical interval final 12 months.

Meynell stated chief executives have been going through an growing variety of challenges, together with the necessity to obtain web zero targets and sort out provide chain points in an inflationary and unsure financial surroundings.

“Accordingly, boards worldwide will likely be contemplating fastidiously whether or not they have the suitable particular person in place on the high,” he stated.

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