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Tenure duration reflects a similar problem: the number of CEOs lasting less than two years in the role is increasing.
Turnover amongst chief executive officers (CEO) globally spiked in the first quarter of 2024. According to the Global CEO Turnover Index, published Russell Reynolds Associates while a total of 68 CEOs were appointed, 52 CEOs departed the role — marking the highest Q1 totals since 2018 and 2020 respectively.
At the same time, the tenure duration reflects a similar problem: the number of CEOs lasting less than two years in the role is increasing. Failed CEO appointments — clarified in the report as those lasting less than two years — accounted for 15.1% of outgoing CEOs. This is up from an average of 9.6% since 2019.
For comparison, the average tenure of CEOs in 2023 was 8.1 years.
The report also looked into statistics by gender, which affirmed that women remain vastly underrepresented in the CEO role. Of the 68 CEOs appointed in the first quarter of 2024, only five were women. The report projects: "At the current pace of change, it’s estimated to take 88 years to achieve global gender parity."
Even then, almost a quarter of women CEOs lasted less than two years in the top seat. Per the index, women CEOs are more than twice as likely (24.1%) to leave their roles within two years of appointment, and are four times more likely to last less than 12 months in the CEO role than men.
A similar trend is reflected amongst the chief financial officer (CFO) role, of which turnover spiked in the first quarter of 2024. A total of 82 new CFOs were appointed in Q1 2024 — on par with the record CFO turnover seen in Q1 2021.
On a more positive note, appointments in women CFOs marked a three-year high. Despite women still being underrepresented in the CFO role, 20 of the 82 CFOs appointed in Q1 2024 were women. This marked the highest number of women CFO appointments since the first quarter of 2021.
Interestingly, over half of CFOs (55%) are internal appointments, suggesting CFO succession plans are coming to fruition.
Lastly, the tech industry saw the highest CFO turnover since Q1 2022 at 6.2%.
Per the study, "High CFO turnover is reflective of CFOs increasingly being considered as succession candidates for the CEO role, CEOs often replacing their finance leader within the first year of their tenure, and increased retirement rates amongst CFOs post-pandemic."
Lead image / Global CEO Turnover Index
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