NEW YORK: The most recent Weber Shandwick CEO Departures study shows a decline in the number CEOs leaving their positions at Fortune 500 companies for the first three quarters of this year compared with the same period in 2005.
In the first three quarters of this year, 49 CEOs have left their position versus 58 last year, a 16% decline.
Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick, said the decline is due to greater board scrutiny; increased regulatory restrictions, such as the Sarbanes-Oxley Act; and the appointment of well-seasoned CEOs. Boards are also thinking farther into the future.
"Boards thought they could bring in a white knight to rescue the company," said Gaines-Ross. "I think now they're seeing that that's not the best solution."
Gaines-Ross said that for PR pros, constant turnover presents a challenge, as the communications team helps plan the first hundred days and organize schedules and meetings.
"It's like starting [over] from ground zero," said Gaines-Ross.
CEO turnover also affect partner and internal communications, causing concern for customers, investors, and employees.
The study also found that there is a rise in the number of inside executives who are selected to be CEO in this time period: 59% in 2005 versus 69% in 2006. These insiders have worked with the company for three or more years.
"These are people who are prepared and have a built-in coalition of support," said Gaines-Ross.
The CEO Departures study is released every quarter with a year-end annual roundup. Even the smallest Fortune 500 corporation on the 2006 list earned about $4 billion in revenues, meaning there's a great deal at stake when the CEO changes.