Australia’s Record CEO Turnover Explained
A recently published report has illustrated a growing trend here in Australia: an astonishingly high turnover of CEOs, breaking previous records.
The revelation comes courtesy of Robert Half, a recruiting group that crunched the numbers and found that more than 40 of the top 200 ASX CEOs in Australia - 22% - have been in the position for less than a year; this is up from 20% in 2019.
The Australian Financial Review’s Patrick Durkin argues that the high turnover rate is largely due to the fact that business leaders are being burned in the wake of the Hayne royal commission and the slowing economy.
The average length of tenure, according to the data, is just six-years.
“It’s likely that demand for technology expertise will also continue to grow,” David Jones from recruiter that published the report, Robert Half, said. “Given the macroeconomic challenges facing Australia, the efforts of certain sectors like financial services in rebuilding customer trust and the continued demand for rapid business transformation, our current climate is one in which externally appointed business leaders can really thrive.”
The research shows that the rate of organisations looking to overseas CEOs is also rising, matching the previous trend of businesses appointing internal successors, which stands at a reported 40 per cent of the 200 CEOs mentioned; a rise of 4%.
However, as the AFR is reporting, “internal CEO hires still make up more than 50 per cent of appointments, with the likes of Afterpay CEO Anthony Eisen and AGL’s Brett Redman being promoted from within.”
The report shows that while the trend is noticeable across many industries in Australia, the banking and financial services industries have been especially exhibiting the trend; AMP’s newly-installed Francesco De Ferrari and NAB’s Ross McEwan are two such examples.
The Sydney Morning Herald earlier this year reported that “Mr McEwan’s looming starting date at NAB comes after a tumultuous year for the bank, due to the shock resignation announcements of former chief executive Andrew Thorburn and Dr Henry, in response to harsh criticism from the Hayne royal commission.”
A separate survey has found that of Australia’s top fifty CEOs, Generation X has reportedly “taken over control of corporate Australia, producing a new wave of CEOs who are far more international than their US counterparts.” These candidates are more than likely well-versed in tech, considering that 11 per cent of the top-ten CEOs now have a background in high-tech industries.