How many CEOs of top global companies were replaced last year?
Well, the answer may surprise you and what also may surprise you is the reason they lost their job.
PwC have been keeping track of the movements of the CEOs of the largest 2,500 global publicly listed companies since 2000 and the most recent data for 2018 has been released and it shows some interesting things.
In 2018 the number of departures of CEOs reached a record level with nearly 18% being replaced (up from 12% in 2010).
It was the reason for their departure though which raised some eyebrows.
CEOs can leave their jobs for a variety of reason and PwC categorised the reasons as planned (e.g. they were due to retire), forced (e.g. they did something a bit “naughty”) or M&A (e.g. they were no longer needed due to a merger or acquisition).
The latest split showed the 18% of departures as:
Planned – 12.0%
Forced – 3.6%
M&A – 2.0%
Digging a bit deeper though into the forced departures shows some worrying reasons.
Historically the main reason CEOs were forced out was due to poor results but for the first time the largest group of CEOs forced out was due to integrity reasons.
In 2018, 39% of those forced out were due to integrity reasons. Ten years ago in 2008 the corresponding figure was only 10%.
These integrity issues could include scandals such as improper conduct, fraud, bribery, insider trading, environmental disasters, misleading CVs, and sexual indiscretions, according to PwC.
So, in summary more CEOs are being fired and the main reason is integrity issues.
All in all, a pretty poor performance…