Last year, chief executive departures from companies in prominent equity indices increased sharply, led by high turnover at UK-listed companies, where top-level departures more than doubled.
According to research by Russell Reynolds Associates, 175 chief executives resigned from the world’s leading public companies in 2022, a five-year peak and an increase from the previous year’s figure of 133.
The research found that London-listed companies accounted for one in five departures, with 38 FTSE 350 chief executives leaving in 2022, more than double the 18 departures from the previous year.
“British businesses have endured a tumultuous few years, with the economy recovering from the pandemic more slowly than other G7 nations and the nation facing additional challenges from Brexit-related supply chain issues,” said Luke Meynell, managing director at Russell Reynolds Associates.
London-listed company leadership departures doubled.
Leadership changes in the United States and Australia also contributed to the global trend, as both the S&P 500 and ASX 200 saw an increase in CEO turnover.
As a result of guiding their companies through obstacles such as the Covid-19 pandemic and the conflict in Ukraine, some executives have remained in their positions for longer than anticipated to ensure stability.
After three years of chronic weariness, “this bottleneck is now wide open, and a number of CEOs are resigning,” researchers said.
In the United Kingdom, the number of chief executive departures from FTSE 100 companies increased by 63% to 13, while exits from mid-cap FTSE 250 companies increased by 150% to 25.
Euronext 100 European enterprises dropped 50% from the previous year.
The ten chief executive departures from Euronext 100 companies in Europe decreased by fifty percent from the previous year. There were 22 such departures from the Nikkei 225, two fewer than in 2021.
As companies sought to secure pandemic-related successes and respond to supply-chain pressures, the number of leadership departures in the healthcare and pharmaceutical industries increased by almost threefold to 14 in the preceding year.
Eight chief executives have already left their positions at UK-listed companies in the first three months of the year, according to the research, which is a slight increase from the seven departures documented during the same time period in 2017.
Meynell stated that chief executives were confronting an increasing number of obstacles, such as the need to achieve net zero goals and address supply chain issues in an inflationary and uncertain economic climate.
“Accordingly, boards around the world will carefully consider whether they have the right leader in place,” he said.