This Crisis Is Different for CEO Turnover, Data Shows
The Agenda article, “This Crisis Is Different for CEO Turnover, Data Shows," quoted Russell Reynolds Associates Consultant Margot McShane on why CEO transitions have slowed down and the importance of fostering corporate culture in a remote environment. The article is excerpted below.
CEOs at companies in the S&P 500 are staying where they are as the pandemic drags on. While the initial wave of the pandemic coincided with high CEO turnover in the first and second quarters, turnover has tapered dramatically in the third quarter, data from Spencer Stuart shows.
Meanwhile, for those companies that have filled CEO roles in the pandemic, more boards than ever before have tapped directors to take the helm. Experts suggest this shows boards are looking for a known quantity when it comes to leadership.
Part of the reason CEO turnover declined so quickly is the multiplicity of pandemic-related uncertainties in the short-term future, says Margot McShane, director of Russell Reynolds' Board & CEO Advisory Partners.
“This is unlike other times where there have been downturns," says McShane. “Companies are sticking with their CEOs for longer as things stabilize."
“A blind spot of boards is culture," warns McShane. “Culture derailers can become toxic seeds that erode on goodwill, particularly on those in the company that are part of diverse communities," she says.
According to McShane, cultivating corporate culture remotely will be one of the biggest challenges facing CEOs in the future, as a large amount of work has already shifted to remote work.
“If you're going into a pandemic with a deficit around culture, that has made it more challenging to lead with lower empathy and satisfaction scores, more retention issues, and more difficulty in creating a sense of cohesion."
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