Experienced CEOs aren’t the safe bet boards think they are

THE corporate boardroom is one of the most opaque places in US business. It’s here that directors wrestle with the sensitive and contentious issues they’d rather shield from the public eye – compensation, crisis management, talent development, corporate culture and those now incendiary acronyms, DEI (diversity, equity and inclusion) and ESG (environmental, social and governance).

One of the rare times we do get a clear view of a board’s thinking is when it undertakes its most important and public job: choosing a new chief executive officer. This critical choice reflects not only a company’s pain points and priorities, but also its directors’ outlook on the broader business world.

What we can parse then from new Spencer Stuart data on CEO transitions is that there’s been a fair amount of gloom floating around corporate America recently. The executive search firm found that the cohort of incoming S&P 500 CEOs last year were, at an average age of 56.4, the oldest it has ever recorded. More than 20 per cent had previous CEO experience, up from just 7 per cent in 2022. And, after a historic level of CEO turnover post-pandemic, the number of new appointees was down, as boards put the brakes on shuffling the top job.