To stick, a CEO had better work quick

NEW YORK: Corporate communications officers may have less time than

they thought to promote a company's new CEO.

According to a new Ketchum survey of 1,000 individual investors, CEOs

have an average of just 18 months to make a difference at a public

company before shareholders will boot the new executive.

David Rockland, director of the Ketchum Reputation Lab, said survey

results reflect an onus placed on corporate communications professionals

to communicate rapidly and well within six months of a CEO change.

'If you're there to serve the CEO and the senior management of a

company, you can't wait around to communicate,' said Rockland. 'You

can't wait for the senior management to figure out where they want to go

and how they want to get there. You have to encourage public

communications about that very quickly.'

Results were clustered at lower time frames, with nearly 50% of survey

respondents willing to grant a new CEO less than a year to show company

improvement. Only 7% of respondents said they would grant incoming CEOs

three or more years to change a business.

Professional investors were even less forgiving. In a separate Ketchum

survey of 25 Wall Street analysts and portfolio managers, new CEOs have

just 14.5 months to increase shareholder value, nearly four months less

than individual investors were willing to grant.

Rockland blamed the stock market for doubling the pace of CEO change in

the past five years.

'If you look at the wild, topsy-turvy changes in the stock market,

things are happening quicker and expectations are higher,' said

Rockland. 'It's at a point where if a CEO comes in now and says he or

she needs a couple of years to rebuild this place, the corporate

communications officer runs a risk in announcing that.'

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in