Tracking CEO Successions...
A blast from the past. I started a website called CEOgo.com back in 2000 when I was at Burson-Marsteller. We tracked CEO comings and goings on a quarterly basis, reasons behind their departures, whether incoming CEOs were insiders or outsiders, activities in their first 100 days, and news and information on what it took to be a good CEO. At the time, there was no such tracking and we became a news and client source for analyzing the turnover rate and other salient information on CEO tenure. Just today I googled CEOgo.com to see if I could find an image and found instead this delightful description from Harvard Business Review’s Working Knowledge archive (see below) which I had not seen before. The site is now defunct since I left Burson a few years later and it withered on the vine.
I raise all this since there have been several other companies tracking CEO comings and goings…from executive search firms to management consultants. I just learned of another site run by Daniel Schauber that tracks executive changes — exechange.com — that I enjoyed. Exechange provides a Push-Out Score providing a score-based likelihood as to whether the CEO (or CFO) was pushed out or not. It alerts investors and others as to whether there’s some underlying risk lurking in the shadows as to why the top executive left. It also gives you a read on how well corporate governance is doing their job.
My fascination with the Push-Out Score has to do with my recall on how hard it was doing our CEOgo analysis and trying to determine whether a CEO left voluntarily or not. We tried to drill down into the underlying reasons but I admit it was much more of a hunch than a solid assessment. We could fairly easily figure out if CEOs were simply retiring, if a better job had come along, if they had fallen ill, and if they were terminated for financial performance but it was the in-between (i.e. executive misbehavior) that was often a black box.
I particularly like the nine criteria they use to assess reasons for the departure (see bullets below).
• Form of the management change announcement • Language in the announcement • Age of the departing executive • Notice period (time between announcement and departure) • Tenure • Share price development • Official reason given • Circumstances of the management change • Succession (e.g., external vs. internal, permanent vs. interim replacement)
In an article on the scoring by Stanford Graduate School of Business, the authors write: “For example, the exechange model considers the tone, clarity, and language used to describe the departure, including statements by board representatives and the outgoing CEO or CFO.” Being in the communications business, I appreciated the Push-Out Score taking language and tone into account. I always try to advise clients that if the CEO succession is positive and evident of careful long-term planning, show it. Add some excitement into the announcement. A good example is the elevation of Jane Fraser to CEO at Citigroup and retirement of Michael Corbat. They are practically giddy.
Exechange is a great resource for understanding and watching CEO turnover and how to do it right (and wrong). Glad to have found it.
And here is the CEOgo.com blurb I mention upfront.
