By Jerry Haar, Siddharth Upadhyay, and Vaibhav Mishra
CEO turnover has risen notably over the last decade. Globally, CEO departures across major indices are now at record levels. Performance shortfalls and governance concerns are of increasing importance. Research indicates that, to avoid turbulence, firms generally need a disciplined transition architecture spanning strategy, organization, stakeholders, and robust, long term succession planning.
In May 2025, UnitedHealth Group CEO Andrew Witty unexpectedly resigned the same day the firm withdrew its 2025 outlook, sending shares spiraling, as investors feared uncertainty about the company’s leadership direction. Mr. Witty was appointed CEO in December 2024, after the previous CEO was tragically murdered. Similarly, in September 2024, Campari’s recently appointed CEO stepped down, after less than six months in the role, citing personal reasons. On the same day, shares fell about 6 percent on the announcement, as investors expressed concerns about the company’s health. By contrast, in March 2024, Boeing CEO Dave Calhoun announced retirement while the company was facing intense scrutiny due to product safety concerns. While the company took heavy losses in that period, the organization’s market value stabilized after one year under the leadership of Kelly Ortberg, the new CEO. Turnover and succession are core events in a firm’s lifecycle, but the consequences for the firm’s performance remain unpredictable.
CEO succession is among the most visible governance events that firms experience, and successions often impose short-term disruption due to uncertainty in the firm’s strategic direction under the new leadership. Understandably, stakeholders may face information asymmetry regarding the incoming CEO’s internal fit, strategy execution capabilities, and board preparedness. In truth, markets do not interpret CEO turnover as a single, uniform signal, and the effects of new CEO succession require time to manifest.1 Investors update beliefs over a period of time based on whether the incoming CEO remains in place long enough for uncertainty to dissipate.
CEO succession is among the most visible governance events that firms experience.
CEO turnover has risen notably over the last decade, with especially sharp increases in 2024–5 and a clear shift toward shorter tenures, more planned transitions, and greater willingness to change CEOs even in high performing firms. Global CEO departures across major indices are now at record levels; 234 CEOs left their roles globally in 2025, a 16 percent year over year increase and 21 percent above the recent eight year average.2 Tenure is shortening: departing CEOs’ average tenure in large cap firms has trended down; one large study notes a record low average of 7.4 years for departing CEOs in 2024, followed by 9.3 years in 2025 as deferred transitions were executed.3
For multinational firms, the drivers of CEO turnover are a mix of performance related and non performance factors. These comprise planned succession and leadership cycle completion; retirement and generational transition; burnout, role stress, and changing work expectations; strategic realignment and changing skill requirements; and performance shortfalls and governance concerns. These last two are of increasing importance. Boards are seeking CEOs with digital technologies, AI, geopolitical risk, and stakeholder management, leading to replacement even in strong performing firms. Understandably, poor financial performance remains a classic trigger, especially in dual class and underperforming firms where governance structures eventually force a leadership change.
Recognizably, differences by industry come into play as well. Take technology. One global index analysis reports that CEO turnover in technology sector was up about 90 percent year on year in 2024, vastly exceeding the overall 9 percent rise across all industries, reflecting rapid disruption, activist pressure, and high growth expectations.3
Ensuring a sound and effective CEO transition is paramount. To avoid turbulence, firms generally need a disciplined transition architecture spanning strategy, organization, stakeholders and robust, long term succession planning. Firms need to establish a formal, board led succession process that updates regularly, evaluates internal and external candidates, and defines desired future CEO capabilities in light of strategy and external risk.
A prerequisite for a succession transition is clear transition governance. This means defining roles for the board chair / lead director, outgoing CEO, HR, and key committee chairs. This is very important, since it will avoid ambiguous authority or dual power centers during the transition period. The same may be said for the need for a structured, overlapping handoff period. Such an overlap (e.g., several months of transition where the outgoing CEO hands off stakeholders and critical issues) ensures that decision rights are clearly reassigned to the new CEO by a firm date.
Coherent messaging to markets and employees is also essential. The firm should prepare a communication plan that explains the rationale, emphasizes continuity in core strategy, and articulates how the new CEO’s profile fits the firm’s future direction, mitigating speculation and rumor. Finally, early alignment on strategy and risk appetite are paramount as well. The board and the incoming CEO should jointly revisit strategic priorities, capital allocation, and risk posture early in the transition to avoid later strategic whiplash.5
Any CEO change increases equity volatility and short term risk, regardless of the reason.
CEO governance can indeed be turbulent. Disney CEO Bob Chapek was removed as CEO in November 2022 after less than three years in the role, and Bob Iger was brought back, highlighting both elevated turnover and reduced tolerance for perceived missteps at a global media multinational. However, well-planned, low-conflict successions are the norm. For example, at IBM, Sam Palmisano’s transition to Gina Rometty used a long term leadership development process. Rometty was known to the board, employees, and key clients; contemporaneous analysis notes that the transition was seen as “commendably smooth.” At PepsiCo, Indra Nooyi’s handoff to longtime PepsiCo executive Ramón Laguarta in 2018 was announced well in advance, with clear messaging about continuity in strategy and ongoing focus on “Performance with Purpose,” minimizing market and organizational disruption.
Research and business practice tell us that markets generally dislike uncertainty. Any CEO change increases equity volatility and short term risk, regardless of the reason. As CEO tenure, succession and firm value continue to loom large in shaping the corporate landscape, especially among multinational firms, investors and shareholders would do well to carefully monitor changes in the corporate governance environment.
