Dive Brief:
- CEO turnover in U.S. companies rose by 22% in the first quarter of 2019 over the same period in 2018, according to a new report by Challenger, Gray & Christmas, Inc., the global outplacement and business and executive coaching firm. Companies announced 135 CEO changeovers in March, an 8.9% increase over February's 124 total, said Challenger.
- Although CEO changes in Q1 2019 were 2% lower than in Q4 2018, this figure was the highest first-quarter total since the company began tracking CEO turnover in 2000, the report said. Notably, in Q1 2019, a majority of the 331 CEO replacements were men, 27% of whom replaced women company heads, Challenger found. Of the 68 women named to the top spots in their organizations, 45 replaced male CEOs, the report continued.
- "We are seeing considerable churn in the chief executive role. Companies are grappling with changing consumer behavior and new technologies disrupting almost all industries," Andrew Challenger, the company's VP, said in a press release.
Dive Insight:
Numerous economists have warned of a potential recession, with some cautioning it could come as early as 2019. CEOs in a recent Conference Board survey named a possible downturn among their biggest worries for 2019 — and Challenger notes that economic uncertainty may be one reason companies are making changes to their C-suite right now.
While company chiefs leave their posts for any number of reasons, including retirement, a new opportunity, career change or personal commitment of some kind, some departures may raise "red flags" for companies. According to Challenger's report, three CEOs reportedly left because of a scandal, two departed allegedly for professional misconduct, and two others left because of sexual misconduct allegations. Such departures may serve as a reminder to employers about the importance of setting the tone of the culture from the top.
Though it addressed the gender gap among company heads, Challenger's report didn't show the number of women in the total makeup of CEOs. On the up side, Challenger reported in 2018 that more women took over CEO spots that year than in 2017. The challenge for companies is to advance more women into leadership roles, where they're more likely to be tapped for C-suite positions.
