Why is CEO-churn on the rise?

While most of the UK enjoyed a rainy national holiday 🌧️ on Monday, the Working It podcast team was at work, recording an interview with Cal Newport, best-selling author and productivity guru, about his latest book, Slow Productivity. More on that to come, but I was struck by Cal’s insistence that the only way forward, for any of us, is to do less, but to do it better.

It prompted me to slow down — and cut the number of things I am doing at once. So if I haven’t replied to your email or message, that’s why. (I’ll figure out an elegant “holding” response for when my inbox is overwhelmed — if you have a good example, do send it over: isabel.berwick@ft.com.)

Read on for a look into why chief executives often don’t last long at the top, especially when they are women. I’ve had to pause Office Therapy for a week to gather more expert advice on a thorny issue — but we will return!

What’s the problem with CEOs?

I started delving into some depressing data about the tiny numbers of women CEOs — and their short tenure once they do get to the top. And then, as you do, I also found myself down a rabbit hole of CEO timelines. Few of them are encouraging 🐰.

Overall, Russell Reynolds Associates, which runs a quarterly Global CEO Turnover index, finds that CEO-churn is at an all-time high. Bosses across the S&P 500 and FTSE 350 stayed an average of 7.6 years in role in 2022, compared to 9.2 years in 2018.

I wanted to know more about turnover trends, especially for women at the top of business, so I asked Ty Wiggins, Russell Reynolds’ global lead of its CEO and executive transition practice. (I was going to say he’s a “CEO whisperer”, but then I just thought of horses 🐎).

Is the so-called “glass cliff” real? That’s the unsavoury practice of appointing a woman to lead an organisation when it is already in deep trouble. It’s a no-win situation. When my colleague Pilita Clark last wrote about this topic, some of the readers’ comments showed a certain, ahem, scepticism that this is a real concept. As FT readers can still comment anonymously, we can assume these are real views. (Sample: “So, if you’re a woman CEO and you fail. it’s because of a glass cliff. And if you’re a woman executive and you don’t get to be CEO, it’s because of a glass ceiling.” 🤦🏼‍♀️)

Ty told me that yes, the glass cliff is real. “With women CEOs more than twice as likely (24.1 per cent) to leave their roles within two years of appointment, and four times more likely to last less than 12 months in the CEO role than men, it certainly appears that the data supports the glass cliff.”

Why is this? Ty cites a possible problem with boards. “Do they have realistic expectations on a new CEO’s performance — or are they biased to make a decision too early? This would extend to support around key decisions, initiatives and people.”

Overall, Ty reckons that boards need to get their act together on picking the next leader as soon as a new boss is installed. “The best time to start thinking about finding your next CEO is immediately after you appoint your current CEO. It’s important for the board to align on what the next leader should look like, which is not necessarily a replica of your current CEO. It’s also important not to shy away from sensitivities, but address them sensitively — the best succession plans are ones where boards and sitting CEOs are able to come together constructively.”

So many pieces of this board/CEO puzzle remain imperfect — but perhaps it’s in this central but sometimes tricky relationship that we may find a brighter future for the few women who do get to the top. Sample depressing statistic from the Russell Reynolds trend index: “Of the 68 CEOs appointed in Q1 2024, only five were women. At the current pace of change, it’s estimated to take 88 years to achieve global gender parity ⚖️.”

Overall, the necessity of a very close/time-consuming relationship with the board seems to come as a surprise to some new CEOs. Ty has just written a book — The New CEO — and in research for that, he discovered that: “40 per cent of new CEOs are surprised at the extent of required board interaction. For some, the time spent on board-related activities was so significant that they struggled to execute early priorities.”

Can better board/CEO relations help more women get to the top — and stay there? Do boards need to start searching for their next — dare I say it, potentially female — leader as soon as they’ve appointed someone new? So many questions: email me on all this — isabel.berwick@ft.com.

This week on the Working It podcast

It was a treat to talk to my friend, colleague and fellow FT podcast host, Claer Barrett, at Daunt Books in the City. We covered a whole range of Working It themes, including workplace dilemmas, becoming a better manager and finding a new definition for ambition. The conversation was at an event to launch my book, The Future-Proof Career, and we’ve made it into this week’s podcast episode. We hope you find it useful.

Five top stories from the world of work

1. Shameless comebacks show we are in the age of chutzpah: So many business and political failures (think Adam Neumann of WeWork) are fairly swiftly followed by unrepentant returns. Emma Jacobs looks at the changing world of bouncebacks.

2. Is the corporate DEI panic finally over? Amid warnings that diversity programmes are being rolled back, especially in the US, Taylor Nicole Rogers finds a rather more upbeat reality among practitioners in the sector.

3. How deep are the problems at St James’s Place? If you like a deep dive into corporate culture — and how leaders react to growing crises — this is a great feature by Emma Dunkley and Sally Hickey on a big UK financial services provider, which focuses on wealthy clients.

4. Could ketamine be the next fix for workplace depression? Emma Jacobs looks into the emerging trend for ketamine, taken under supervision, as a workplace benefit to help with mental health conditions.

5. Garrick Club votes to allow women members for the first time: Those bastions of old-school (literally) networking, London’s gentlemen’s clubs, are under threat. Women are finally to be allowed into the Garrick. Will any of them apply?

A word from the Working It community

There was a big response to last week’s newsletter about new approaches to tackling bullying, and I will return to that in a longer feature. Do keep the ideas and personal experiences coming. It’s a reckoning that’s long overdue.

Meanwhile, I wanted to highlight readers’ thoughts on the previous week’s newsletter about EY/Saïd Business School research into leaders’ “blind spots”, especially when their organisations are going through periods of change and transformation. Here’s Nuala Walsh, chief executive of MindEquity Consulting:

“The EY/ Saïd report rightly highlights the importance of human-centred leadership in transformational change. However, simply tuning into colleagues’ emotions and measuring behaviour is not the same as understanding or interpreting behaviour. Success depends not only on analysing CEO blind spots but also their ‘deaf spots’.

“Too often, people tune out voices that are different or dissenting, inconvenient or uncomfortable. We hear what we want, particularly in high-stakes emotional situations . . . Leaders who actively monitor these associated blind spots and deaf spots tend to make fewer decision errors and outperform, gaining an underestimated source of advantage.”

And finally . . . 

Thank you to everyone who entered last week’s book giveaway. Winners will be notified tomorrow — and there’ll be another draw next week.