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19 Oct. 2016 | Comments (0)

The rate of succession of older CEOs of large U.S. public companies slowed significantly in 2015, bringing to a halt a generational shift in business leadership that had been observed since the 2008-2009 financial crisis, according to a new report by The Conference Board. CEO Succession Practices: 2016 Edition and its companion report, Key Dimensions of Effective CEO Succession [registration required for both], annually documents and analyzes succession events of chief executives of S&P 500 companies. In 2015, there were 56 cases of S&P companies that underwent a CEO turnover. [Read an exclusive Wall Street Journal article about the report’s findings.] Prior editions of the study had shown an acceleration of the succession rate of CEOs aged 64 or older following the so-called Great Recession of 2008. From 2009-2014, in particular, their average turnover rate was 25.5 percent, compared to 8.1 percent for younger CEOs. However, in 2015, older CEOs departed at a rate of 15.1 percent, which is much more aligned with the average number for 2001-2008. “There are multiple possible explanations for this finding, including of course an improvement in firm performance and the overall economy,” said Matteo Tonello, Vice President and Managing Director at The Conference Board, and a co-author of the report with Jason D. Schloetzer, Professor at the McDonough School of Business at Georgetown University. “But when you see older CEOs departing at a rate of 25 percent or higher for a number of years in a row, a slowdown becomes natural and signals the completion of a generational change process.” Another notable finding from the report is that, at least when it comes to business leadership, 2015 won’t go down in history as the year when the glass ceiling was broken. A national party may have nominated its first female presidential candidate, but nearly all CEOs of large U.S. public companies are male and only one of the 56 top leadership positions that became available in the S&P 500 went to a woman. The highest share of incoming female CEOs, 18.2 percent, was seen in 2011, when 10 of the 55 cases of CEO succession resulted in the selection of a woman as chief executive. The 2015 percentage is the lowest reported by The Conference Board since 2009.
  • About the Author:Matteo Tonello

    Matteo Tonello

    Matteo Tonello is managing director at The Conference Board. In his role, Tonello advises members of The Conference Board on issues of corporate governance, risk management, corporate sustainability a…

    Full Bio | More from Matteo Tonello

     

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