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.'