CEO Turnover Higher Among Retailers
NRF Stores Magazine talks to Brenda Malloy
The National Retail Federation's Stores magazine asks Brenday Malloy to elaborate on the causes for high turnover in senior retail leadership and how organizations should be approaching CEO succession.
According to the 2011 Russell Reynolds Associates U.S. Retail CEO Study, 59 percent of respondents said they had a change of CEO leadership during the five-year period surveyed. The study, which examined 81 multi-channel retailers in the United States between 2006 and 2011, found that 42 percent of CEOs left after serving five years or less, compared with an average of 32 percent among Fortune 1000 CEOs. Even more surprising: 27 percent of retail CEOs left after serving three years or less.
“The world is becoming increasingly complex and it is the responsibility of the CEO to go into a highly competitive arena, understand the value proposition and deliver it,” says Brenda Malloy, managing director and global retail practice leader of Russell Reynolds Associates. “It’s a tough job and having someone with the right skills isn’t easy to find.”
One of the report’s top recommendations was to identify the specific leadership competencies a firm needs to drive its strategy and strive to build those competencies in key people through planned executive development. Where necessary, it can add those capabilities to the talent pool through external recruiting.“It is really about if the board is taking CEO succession planning seriously,” Malloy says, “what their strategic objectives are, how they are looking at internal talent and whether they really have an accurate assessment of the talent in the organization. It starts at the board and permeates through the organization.”
Access the full report: A Perfect Storm: CEO Succession Challenges in Retail.