Paul L. Caron

Thursday, February 6, 2020

WSJ: 15 Years Is The Ideal Tenure For CEOs (And Law School Deans)

Wall Street Journal. New Thinking Emerges on Optimal Tenure for a CEO:

Few executives manage to stay in power for decades, although the tenure of S&P 500 chief executive officers has gradually risen since the financial crisis, and the founders of some of the hottest tech companies have established voting control that could help them remain at the helm indefinitely.

Some corporate boards are increasingly seeing merit in longer CEO tenures, said James Citrin, head of the North American CEO practice for Spencer Stuart, a leadership advisory and executive recruiting firm. “The mind-set about CEO tenure is at the beginning of a potential change,” he said.

Over the past decade, the tenure of S&P 500 CEOs has risen, said Matteo Tonello, managing director of the Conference Board, a research group. The average S&P 500 CEO tenure as of 2018 was 10.2 years on the job, up from an average tenure of 7.2 years in 2009. CEO tenure statistics can vary from year to year and across analytical methods. ...

New research from Spencer Stuart suggests that when top executives stay for more than a decade, they often deliver some of their best years of performance. The executive-search firm analyzed the annual financial results of about 750 S&P 500 CEOs during their tenures and interviewed dozens of leaders in a report published in Harvard Business Review late last year [The CEO Life Cycle]. It showed that CEOs had some of their best value-creating periods in years 11 to 15 on the job.


In these “golden years” of CEO tenure, as the report describes them, executives benefit from strong institutional knowledge and the experience of guiding a company through multiple crises. “In many cases, longer is in fact better,” said Mr. Citrin, a lead author of the report, who has presented its findings to many corporate board members.

The median tenure of law school deans is 3.16 years. The average tenure is 3.81 years. Only three current law school deans have served more than 12 years: Brad Toben (Baylor, 28.25 years), Avi Soifer (Hawaii, 16.71 years), and Joseph Kearney (Marquette, 16.62 Years).

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