As turnover levels off, our annual CEO succession study shows chief executives and their boards adopting new survival strategies.
Welcome to the era of the inclusive chief executive officer — a very different species from the “imperial” CEOs who roamed the corporate landscape not so long ago. Whereas imperial CEOs answered only to themselves, the power of today’s CEO is not as absolute: Boards of directors are becoming more critical and more closely involved in setting strategy, and are far more likely to insist that CEOs deliver acceptable shareholder returns (as well as demonstrate ethical conduct). Indeed, the data indicates that boards are increasingly prepared to replace CEOs in anticipation of disappointing future performance, instead of merely as punishment for poor past performance. At the same time, large shareholders like hedge funds and private equity firms are taking a more active role in decisions that were once the sole purview of the CEO.
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