On 15 May 2017, Chloe Cornish of the Financial Times wrote an interesting article titled, “UK chiefs spend less than five years in post”. According to a recent study by PwC on the world’s top 2,500 companies, it was revealed that “British companies move on faster than in any country apart from Brazil, Russia and India”.
What makes this article particularly insightful in the GRC context is that, when chief executives serve for shorter periods, it is hard for them to have a real impact on the business. It is therefore all about “impact” during a five-year global average period, and more specifically, being able to make tangible changes to a business.
On the other hand, of course, various stakeholders, increasingly demand faster results in the short-term, but it is important to consider the long-term changes in the interests of ensuring stable and sustainable growth during a five-year fixed period. This is precisely why good boards engage meaningfully various stakeholders in open and frequent dialogue in the interests of delivering good and sustainable corporate governance.
The article also revealed that CEOs in the UK face an “unforgiving” business environment, which is driven by social, political and technological advancements. Moreover, the head of consulting at PwC UK, Marco Amiltrano, explained that the study found that CEOs are being held increasingly accountable for their actions.
Last but not least, it is important to note that, more than three-quarters of newly appointed CEOs in the UK in 2016 had never led a public company before. And, their average age was 52, which made them one year younger than their western European colleagues. The study also revealed that there is plenty of room for improvement in the UK with regards to diversity and top appointments according to 2016 figures. More specifically, only three of the 41 new CEOs in the UK companies that were studied were women.
Prof. Emmanouil Ioannidis