OPINION11 February 2019
Is CEO churn a reflection of our times?
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Lorna Tilbian looks at the changes taking place at the top of many businesses and what this signifies about the state of our financial markets.
In an unprecedented period of change last year, 18 FTSE 100 CEOs departed – from Mark Wilson at Aviva to Sir Martin Sorrell’s high-profile exit from WPP.
Their tenures were somewhat different: Wilson joined Aviva, the UK’s largest insurance company, in 2013, while Sorrell founded WPP, the world’s largest agency group, in 1985. Wilson served just five years, in contrast to Sorrell’s run of 32 years – which makes him the longest-serving FTSE CEO of modern times.
Interestingly, Sorrell also made the fastest comeback in recent corporate history, returning with a new shell company within about six weeks of his departure and his first digital acquisition a month later.
According to a survey published by Nasdaq-quoted executive search consultancy Heidrick & Struggles, the global CEO churn rate has been rising steadily since the start of the millennium and has nearly tripled, from 3.4% in 2001 to 9.3% in 2016.
Over the same period, the FTSE 350 churn rate increased from 9.5% ...