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More CEOs were forced out for ethical lapses in 2018 than poor financial performance

News Summed Up 2019-05-15 05:30:00

as boards clamped down on misconduct in the #MeToo era and placed greater scrutiny on executive behavior, more CEOs were pushed out for ethical lapses than for poor financial performance or struggles with their board -- a first for the study by Strategy&, the strategy consulting arm of PwC. (Ted S. Warren/AP)Chief executives faced a year of reckoning in 2018 -- but not for the reasons that have traditionally led to forced departures from the corner office. Meanwhile, 35 percent of ousters in 2018 were a result of poor financial performance and just 13 percent were because of conflicts at the board level or with activist investors that weren’t about financial performance but led to the CEO’s ouster. Compare that to a decade earlier, during the financial crisis in 2008, when 52 percent of forced exits were tied to financial performance, 35 percent to board conflicts and just 10 percent to misconduct. (PwC has examined the reasons for forced departures since 2007, but has run the analysis on overall CEO turnover since 2000.)