The recent crack downs on corporate America are having a deleterious effect on CEO’s job tenure. More and more, CEO’s are being held to account to boards and shareholders. The recent dismissal of Carly Fiorina is just one more in a long line of CEO turn-over recently.
Indeed, the executive turmoil at HP shows that corporate boards, in a post-Enron world, are becoming more active overseers. This means close scrutiny of the wheeling and dealing, the acquisitions, the corporate culture, even the pay package.
The survey reported in this article also showed some interesting other trends.
• The rate of CEO dismissals increased by 170 percent from 1995 to 2003. The rate of involuntary turnover eased in 2003, however.
• As CEO turnover rises, companies are often feel forced to turn to outsiders. The track records suggest they'd be better off cultivating qualified insiders.
• Prior experience at the company they are leading is a better indicator of CEOs' success than whether they have been a chief executive before.
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