The number of CEOs either leaving their firm or being fired has increased over the past year. A study by strategy consulting firm Booz & Company shows that the percentage of top bosses who departed the world's 2,500 largest companies rose to 14.2% per year - which translates to 355 CEOs - from 11.6% in 2010.
Overall, 2.2% of the CEOs lost their jobs as a result of merger and acquisition activity, 2.2% were forced out for other reasons, and the remaining 9.8% planned their departures. According to the consultants, the main reason for a higher turnover is the volatile economy. “Boards are increasingly seeking new leaders to help drive growth in a recovering global economy”, say the Booz consultants.
Insider CEO delivers better performances
The study also shows that insider CEOs, those promoted from within the firm rather than appointed from outside, serve longer and, more important, create more value for shareholders. From 2009 to 2011 the firms with insider CEOs outperformed local market indexes by 4.4%, compared to 0.5% for firms led by external CEOs.