CEOs showing stability in the storm

By Gary Neilson and Per-Ola Karlsson

In a year marked by plummeting stock prices, evaporating profits and rising unemployment, one would assume that Chief Executive Officers of the world’s largest companies lost their jobs in dramatic numbers in 2008. But in the face of the worst economic crisis since the Great Depression, CEOs demonstrated surprising “recession resistance” last year according to Booz & Company’s ninth-annual survey of CEO Succession, “Stability in the storm.” Although CEO turnover rose slightly on a global basis from 13.8 per cent in 2007 to 14.4 per cent in 2008, the survey reveals that turnover actually declined in North America and Europe, the regions hit first and hardest by the economic slowdown.

Not surprisingly, the Booz & Company survey led by Stockholm-based Partner Per-Ola Karlsson and Chicago-based Senior Partner Gary Neilson demonstrates outsized increases in CEO exits in the financial services and energy sectors, spurred not only by performance, but also by government interventions and volatility in commodity markets. At the same time the study concludes that the nature of the recession is leading boards of directors of Western companies to stick with the leaders they know.

Now in its ninth year, Booz & Company’s study of global CEO succession patterns examines the degree, nature and geographic spread of leadership change among the world’s 2,500 largest publicly traded companies. Included this year for the first time is data on the incoming class of CEOs that sheds light on the career paths of executives who advance to the top of their organisations.

The CEO Succession study is a signature piece of thought leadership for Booz & Company, generating exceptional press coverage for the firm. The report, CEO Succession Survey 2008: Stability in the storm, is the cover story in the Summer 2009 issue of strategy+business, and is available at www.booz.com.