Every source of executive career intelligence that I currently monitor seems to be chanting the same thing: Executive tenure is on a downward slope and job security is a thing of the past, especially for CEOs. With increased demand for accountability coming from shareholders and scrutiny into business minutiae required by recent legislation, “the revolving door at the top of corporations is spinning fast” (Execunet).
Chiefexecutive.net as early as 2003 noted that “The zeitgeist surrounding corporate America is shifting, too. CEOs once feted on the cover of national magazines are fighting criminal charges of fraud. Public opinion has declared open season on corporate chieftains in general…. Meanwhile, inside corporate conference rooms, activist shareholders and independent boards of directors are showing less tolerance than ever for mediocre performance and no tolerance at all for poor results.”
Dave Opton at Execunet observes that “Long gone are the days of gold watches and lifetime employment.” He states that a recent survey of 233 executive recruiters showed that 18% of executives do not survive their first year in a new job! There are no “honeymoons” anymore, and executives, particularly CEOs, must hit the ground running.
An Execunet survey of nearly 1,500 executives revealed that they are changing companies every 3.6 years. However the outlook of many executives appears disjointed from this reality, as many expect to remain in their next position 5.4 years.
According to Chiefexecutive.net, time to move up the ranks and overall career length with a single corporation are also declining: “In 1980, the average Fortune 100 CEO spent 26 years with one company. Today, the median tenure of Fortune 100 CEOs is 19 years; for the rest of their Fortune 700 counterparts, it’s barely 16 years—just enough time to join a company after getting an MBA and make the inner circle by one’s early 40s.”
Yet as bad as it may be for U.S. executives, as a group they seem to be better off than those in other countries. Business law professor J. Gilbert Reese in his blog points out that ” A study by Charles E. Lucien, a consultant for Booz Allen Hamilton, on executive tenure showed some surpising results for United States companies. American executives of underperforming companies have longer tenures than executives of underperforming companies in other parts of the developed world.” Apparently the greater minority shareholder voting power and litigation rights in the U.S. provides some protection for executives whose companies are underperforming.