Australia has one of the highest rates of CEO turnover in the world, according to a new study by management consulting group Booz & Company.
Australia has one of the highest rates of CEO turnover in the world, according to a new study by management consulting group Booz & Company.
In the past 12 months, 18% of chief executives of ASX-listed companies have moved on, well above the 13.4% who left in 2008 and the global average of 13.8%.
The average tenure of those CEOs who departed last year was 5.7 years, compared to the global average of 7.2 years.
However, just 2.2% of the departures were the result of underperformance, with the vast majority occurring as a result of planned succession or mergers and acquisitions.
But that is likely to change in the coming years as the slowdown hits, according to Booz & Company principal Victoria Sherwood.
“We’ve seen a huge change in economic conditions as they become more challenging and shareholders’ returns fall away,” she told The Australian.
“Our hypothesis is that CEO departures for reasons of performance do tend to increase in these types of marketplaces.”
Booz & Company believe there could be a number of trends behind Australia’s high turnover levels and relatively short tenures, including chief executives leaving Australia to pursue jobs overseas and more focus on work-life issues.
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