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1、CEO and CFO Turnover in the UK2023 SpotlightThought leadership Delinian Limited and its affiliated companies.May 2023.This publication is for your information only and is not intended as an offer,or a solicitation of an offer,to buy or sell any product or other specific service.All information and o
2、pinions indicated are subject to change without notice.2023 Spotlight:CEO and CFO Turnover in the UKJames Lavell Chief Executive Officer Richard Green Chief Commercial OfficerMark Hevey Senior Vice President and Global Head of Sales,Professional IntelligenceMichael Phillips Vice President,Marketing
3、and CommunicationsAmanda Cifone Senior Marketing DirectorLead authors Maya Imberg Senior Director,Head of Thought Leadership and AnalyticsMaeen Shaban Director of Research and AnalyticsDesignStephanie Warburton Director of Visual CommunicationsDawn Lastre Visual Communications SpecialistThe appointm
4、ent and retention of the right CEO and CFO is of vital importance to any organization.Executive recruitment is a significant business expense,while the long tenure of the CEO,in particular,has been linked to providing greater shareholder value.This brief report examines CEO and CFO turnover at the U
5、Ks largest public companies,those on the FTSE 3501.We focus on 2022 but also look back over the past five years.In addition,we examine the newest group of recruits to these two positions,who took up their posts in 2022.By providing insight into CEO and CFO turnover trends and patterns,this report is
6、 an essential read for businesses,executive recruiters and other organizations looking to engage with this impactful group of senior executives and make the most of their talent.CEO turnover rose to 12.7%in 2022,following significant volatility in 2018-22.The move upward again in 2022 after lows of
7、7-9%in 2020-21 likely reflects a build-up of delayed retirements with boards persuading their CEOs to stay on to guide their businesses through the pandemic and subsequent geopolitical disruption but also a perceived need for new strategic thinking and a more technology-focused skillset to deal with
8、 the business challenges of 2023 and beyond.Median tenure for departing CEOs and CFOs evened out in 2022 at around four years,after diverging in 2019-20.CEOs and CFOs will typically stay in post for around four years.But there was a notable diversion in 2019-20,when tenure levels for departing CEOs
9、rose(to a five-year high of 6.9 years in 2020),while the opposite was true for CFOs(falling to just two years in 2020).CFO turnover declined for a third straight year in 2022 to 13.8%.The most likely cause is that,having seen through the financial ups and downs of recent years,company boards are con
10、tent to let experienced incumbents helm businesses through a cautious period ahead.Moreover,the CFOs fate is often linked to the success(or otherwise)of the CEOs strategy.Recently appointed CEOs and CFOs tend to be younger than their predecessors and,among CFOs,there is a greater gender balance.The
11、age at which CEOs and CFOs are appointed is now in the low 50s,a trend also seen in the US(though US appointees are slightly older).The percentage of women hired as CEOs remains stubbornly at 8-9%although female CFO appointments have tripled since 2018 to reach 36%in 2022.Key findings1 The FTSE 350
12、Index incorporates the largest 350 companies with a primary listing on the London Stock Exchange,comprising the FTSE 100 and the FTSE 250.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|3 The appointment and retention of specialist talent to leadership roles is a high priority for UK businesse
13、s in 2023 and over the next decade2.With the CEO and CFO positions key to the strategic direction of their businesses especially at a time of hightened economic and geopolitical uncertainty UK firms are striving to appoint and retain the best candidates for the optimum tenure.Turnover is the measure
14、 of the movement of people through a business.It can be defined as the proportion of employees that leave an organization during a set period,typically calculated annually3.While turnover includes involuntary departures,such as redundancies,firings and post-M&A restructuring,most turnover among empl
15、oyees and those in the C-suite,such as the CEO,is planned or voluntary4.Why C-suite turnover matters2 The Top Risks for 2023:A Global View,Protiviti,Board Perspectives.3 The Chartered Institute of Personnel and Development(CIPD)defines turnover more technically as“the proportion of employees who lea
16、ve an organization over a set period(often on a year-on-year basis),expressed as a percentage of total workforce numbers”.While most turnover is planned,it can also include involuntary departures(such as redundancies,firings and post-M&A restructuring)in a measure known as“crude”turnover.4 What Happ
17、ens After a Legendary CEO Departs?,Strategy&,PwC;Revelations From Workforce Turnover,ADP Research Institute,2018.5 Cunningham LA.“Long-tenured CEOs can take a business from good to great and these companies have them.”MarketWatch,April 17,2021.6 Limbach P.“CEO tenure and firm value.”Harvard Law Scho
18、ol Forum on Corporate Governance,August 18,2021.While high turnover can be an indication of corporate instability,a certain amount of staff movement at the top is necessary and part of a cycle that enables senior executives to hone their professional acumen,thereby increasing the expertise available
19、 in the overall business ecosystem.Deciding on optimum tenure for senior executives particularly the most influential roles of CEO and CFO is not straightforward.Executive recruitment is a significant business expense,and long CEO tenure has been linked to greater value for The pros and cons of turn
20、overHow do we define turnover and who do we include?The rate of turnover can be defined as the proportion of employees that leave an organization during a set period,calculated annually.For this report,we include anyone who has left their role,regardless of the circumstance be it planned,forced or d
21、ue to restructuring following a merger or acquisition(M&A)or whether they have stayed with or left the company.shareholders as the top men and women enter their“golden years”5 of accumulated experience,knowledge and relationship capital.Nevertheless,even the best matches between company and individu
22、al can be overtaken by changing external circumstances or the natural evolution of a business6.In this brief report,we analyze turnover of the CEO and CFO roles at FTSE 350 companies.We focus on 2022 but also look back over the past five years.By gaining insight into these trends and patterns,busine
23、sses can improve their leadership planning and retention strategies,which are of crucial importance to the health of organizations in the long term.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|4 While CEO turnover moved upwards in 2022 after significant volatility in previous years,CFO turn
24、over declined for a third straight year.Turnover in 2022Trends varied by roleFTSE 350 turnover by role and year(%)Note:CEO stands for chief executive officer;CFO for chief financial officer.Source:BoardEx,an Altrata company,January 202316.419.89.37.412.7CEO8.820.516.515.713.8CFO1819202122
25、Turnover in the C-suiteCEO turnover rose to 12.7%in 2022,following significant volatility over 2018-22.The turnover rate reached a high of almost 20%in 2019 before falling to an annual average of just over 8%in 2020-21.The fact that the turnover rate started to move upward again in 2022 likely indic
26、ates that boards persuaded experienced CEOs,who were looking to retire,to stay on through the most uncertain periods of the pandemic,and that this backlog started to clear towards the end of the period.The upsurge in CEO departures may also be linked to the perceived need for new strategic thinking
27、and a more technology-focused skillset.A significant proportion of current CEOs do not think their existing leadership teams are equipped to deal with the upcoming business challenges7,a factor that could be influencing boards to shake things up and also persuading CEOs to move on.CFO turnover decli
28、ned for a third straight year in 2022 to 13.8%.The most likely cause is that,having seen through the financial ups and downs of recent years,boards are content to let experienced incumbents helm the business through a cautious forecast period with likely restrained capital expenditure and hiring8.Mo
29、reover,the CFOs fate is linked to the success(or otherwise)of the CEOs strategy.Even if a CFO survives the departure of their leader,they are vulnerable to regime change when a new CEO comes in.Interestingly,the average annual turnover of CFOs between 2018 and 2022(17.1%)is similar to that of Fortun
30、e 1000 CFOs(16%)in the US(and follows the same pattern of being higher than the turnover of CEOs)9.7 Global Leadership Monitor Q4 2022,Russell Reynolds.8 CFO Survey Q4 2022,Deloitte.9 For further information on C-suite turnover in the US,see Altratas 2023 Spotlight:C-Suite Turnover in the US.Altrata
31、|2023 Spotlight:CEO and CFO Turnover in the UK|5 TenureCEOs and CFOs typically stay in post for four yearsTenure of leaversFTSE 350 median tenure(years)by role 2018-22Note:Refers to those who departed their roles during the period 2018-22.Source:BoardEx,an Altrata company,January 20233.95.16.93.64.1
32、3.72.42.04.04.0200212022CFOCEO10 The Finance Leader of Tomorrow,Euler Hermes(now Allianz Trade),August 2020.While there is no dominant“smoking gun”theory for these departures from the norm(a glance back at previous years suggests these patterns can be cyclical),the daunting prospect of ha
33、ving to deal with a combination of the fallout from Brexit,the mounting threat of Covid-19 and increasing shareholder activism might have convinced a number of longstanding CEOs to call time(or be called)on their stint at the top.Meanwhile,in times of crisis,CFOs are highly exposed to short-term pre
34、ssures from stakeholders.The issues that arose in 2019-20 were unprecedented and many CFOs were unprepared10 for them.After diverging in 2019-20,the median tenure for departing CEOs and CFOs evened out in 2022 at around four years.CEOs and CFOs will typically stay in post for around four years.But t
35、here was a notable diversion in 2019-20,when tenure levels for departing CEOs rose,while the opposite was true for CFOs.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|6 Turnover in 2022The incoming class of 2022More younger candidates are getting the top jobsAge upon appointmentAge upon appoi
36、ntment by role at FTSE 350 companies(years)Source:BoardEx,an Altrata company,January 202356.556.455.151.752.652.951.552.150.850.7200212022CFOCEOWhat does the latest intake of UK corporate leaders look like?Here we examine the trends affecting the newest recruits to the CEO and CFO positio
37、ns in 2022 and consider how senior executive recruitment may develop.The average age at which CEOs and CFOs are appointed is now in the low 50s.In common with the US,the age at which CEOs and CFOs are appointed is getting younger.While the CEO retains its status as the most experienced member of the
38、 C-suite,in 2022 the average newly appointed CFO was only a couple of years younger and both are generally being appointed while in their early fifties.And while experience and accumulated relationship capital continue to be seen as paramount,there is growing recognition that,in an unpredictable,eve
39、n unprecedentedly volatile business environment,new perspectives and radical ideas can be highly valuable.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|7 More female CFOs but not CEOsGenderProportion of women among new appointees by role and year at FTSE 350 companies(%)Source:BoardEx,an Alt
40、rata company,January 20238.3 8.00.016.78.7CEO2.920.024.123.736.0CFO1819202122Women are still finding it hard to get a foothold in the CEO role but there has been an encouraging increase in female CFOs.The percentage of female CEO appointments remains stubbornly at 8-9%(barring a stark 0%i
41、n the 2020 peak pandemic period,although boards compensated for this in 2021 when 17%of CEO appointments were women).Female CFO appointments have tripled since 2018.While the overall percentage remains disproportionate given the size of the executive female workforce,this increase can be seen as pos
42、itive at a time when the CFO role is enjoying increasing strategic influence.The route to the top is typically but not always from withinMost new CEOs continue to be appointed internally but the CFO picture is more mixed.Given the greater stakes for public companies from a reputational and governanc
43、e perspective,internal CEO candidates offer a proven track record and a demonstrated ability to cope with the pressures of managing a public company.While internal CFO appointments seemed to be trending upwards in recent years,the sudden decrease in 2022 suggests a fallback to more experienced candi
44、dates in light of the new economic reality facing businesses11.11“Current trends in CFO appointments,”BoardEx,September 21,2021.Route to the topProportion of internal appointments among new appointees by role and year at FTSE 350 companies(%)Source:BoardEx,an Altrata company,January 202358.356.057.9
45、61.165.2CEO5.254.358.652.632.0CFO1819202122The percentage of women hired as CEOs remains stubbornly low,but female CFO appointments have tripled since 2018 to 36%in 2022.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|8 The incoming class of 2022MethodologyThis report analyses the r
46、oles of the CEO and CFO at FTSE 350 companies.The FTSE 350 Index is a market-capitalization-weighted stock market index incorporating the largest 350 companies with a primary listing on the London Stock Exchange,comprising the FTSE 100 and the FTSE 250.We take turnover to be the proportion of employ
47、ees that leave an organization during a set period,calculated annually.For this report,we include anyone who has left their role,regardless of circumstance be it planned,forced or due to restructuring following a merger or acquisition(M&A)or whether they have stayed with or left the company.This rep
48、ort leverages BoardExs unique and proprietary Global Leadership Database,which covers board and non-board members,C-suite executives,senior leaders and professional advisers.The database contains more than 2 million profiles of public,private and not-for-profit organizations and the 1.6 million peop
49、le who work for them.All BoardEx data is collected from credible,published sources and cannot be edited by users.Our data is powered by a team of skilled analysts,who research,verify and maintain these profiles.Data details include current and historical roles(with start and end dates)for board posi
50、tions,employment and education.MethodologyAltrata|2023 Spotlight:CEO and CFO Turnover in the UK|9 About AltrataAltrata is a data powerhouse,built to deliver more value to our clients.We are the global leader in data-driven people intelligence on the wealthy and influential.We work at scale with busi
51、nesses and nonprofits across the world from a variety of industries.We help our clients connect with confidence to the people who have the greatest impact on their business.Our products give our clients all the information they need on everyone they need to know.Our data is actionable,accurate,and c
52、omprehensive.And our global team of more than 400 researchers is committed to maintaining millions of profiles and changing data points,so our clients can effectively engage their target audience and make meaningful,lasting connections.Altrata is a registered trademark of Delinian Limited and its af
53、filiated companies,which comprises five dynamic offerings:BoardEx,Boardroom Insiders,RelSci,WealthEngine and Wealth-X.About BoardExBoardEx is the leading provider of executive intelligence and relationship mapping solutions,working with premier organizations across the academic,corporate,executive s
54、earch,private equity,legal,and financial and professional services industries.Since 1999,organizations have trusted BoardEx to identify,qualify and map connection paths to 2 million organizations and the 1.6 million people who lead them,to enhance business development strategy,talent management and alumni relations efforts,as well as conduct data-driven research and analysis.Altrata|2023 Spotlight:CEO and CFO Turnover in the UK|10 To obtain further information or to request a demo,please contact us at: