CEO turnover is up, and boards are favoring experienced insiders who can hit the ground running
- In today’s CEO Daily: Diane Brady digs into the data behind recent chief executive churn.
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Good morning. You’re not imagining it: CEO turnover is up, and 41% of the 22 incoming CEOs in the S&P 500 this quarter had prior experience running public companies, up from 25% in Q1 last year. And the trend of hiring experienced insiders, which we recently noted in this column, is validated in Russell Reynolds’ latest Global CEO Turnover Index. The CEOs who left were also in those roles longer—11.9 years, on average, vs. 8.3 years last year—and it’s taking longer to fill those roles. Similar patterns are playing out globally. For more insight, I spoke with Russell Reynolds’ CEO Constantine Alexandrakis about the type of leader that is in demand right now:
Leaders who can hit the ground running. “One quarter does not tell a story, but there is more urgency in the air, more speed, more change, more transformation. And an experienced pair of hands at a moment like this could be more attractive,” he told me. Boards want leaders who don’t need a steep learning curve or lengthy onboarding, making insiders and experienced CEOs attractive, especially if they previously sat on the company board.
They can create the right team. “It’s not about one person. It’s about a system of people and a leadership team that comes together and drives the change. There’s a risk that boards, and the world in general, are over-indexing on the CEO as the one who is going to make all this happen. It’s the system of the leadership team and the collective within the company.”
They focus on people, not technology. “AI is not about technology. It’s about changing behavior and driving change management, which is really difficult to make happen … Sometimes, just a change is needed. Understand what needs to change in order for the transformation to succeed.”
Alexandrakis is trying to follow his own advice. In September, his term as CEO was renewed through December 2030, and he is approaching the job with a fresh perspective. As he put it: “I am being much more of an enabler of a team and a network and a collective—being the center of that group versus being the top of the pyramid. That’s my aspiration.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
This story was originally featured on Fortune.com