2024 has witnessed a striking trend in the corporate world: an exodus of CEOs. It seems as though every day brings news of another high-profile executive departure.

Intel, Nike, Starbucks, and Campbell’s are just a few of the companies that have seen their CEOs leave this year. The reasons for these departures are varied, from underperformance and misconduct to career pivots.

What a high CEO turnover means

More than 1,800 CEOs announced their departures in 2024, according to Challenger, Gray & Christmas, an outplacement firm that tracks CEO turnover.

The figure represents the highest year-to-date total since the firm began tracking these changes in 2002. The number of CEO exits this year is a 19% increase from the same period last year, which was itself a record-breaking year.

CEO turnover as a metric can be a “helpful indicator of wider trends, including economic health and businesses’ risk appetites,” said Nicolas Behbahani, a people analytics & HR data expert.

“High CEO turnover is reflective of companies’ growing risk appetites and search for leaders who can navigate increasing complexity in the macro business environment, including tech transformation, sustainability, geopolitical crises, and social issues,” Behbahani said.

And indeed, a high rate of turnover at the top is a sign that the corporate world is changing rapidly and that CEOs are under more pressure than ever before.

But while 2024 signals a spike in these departures, it remains to be seen whether this trend will continue in future years. One thing is for certain: the CEO role itself is becoming increasingly challenging.

“The reality is that the to-do list for any new CEO is now much larger,” said Constantine Alexandrakis, CEO at business consulting firm Russell Reynolds Associates.

“On top of the perennial tasks of leading an organisation – to set the vision, coalesce the organisation around a new or refreshed strategy, and manage the financials – you must contend with a growing list of external risks, from economic uncertainty to geopolitical flare-ups, and racial and social injustices,” the CEO said.

“Managing these immediate priorities comes at a time when you must also deliver on growing expectations to position your organisation for long-term growth, moving the dial on complex issues like sustainability, tech transformation, and DE&I, while also building a culture that reflects the needs and wants of an ever-changing workforce,” Alexandrakis said.

“Yet, despite all the challenges new CEOs face, there is a dearth of information on how to get it right.”

In addition to the factors mentioned above, it is worth noting that the COVID pandemic may have played a role in the increase in CEO departures. The pandemic has caused significant disruption to businesses around the world and has forced CEOs to make difficult decisions, leading some to reconsider their career paths.

Also Read: Evolve or die: Global CEOs sound the alarm

Why some CEOs quit before disaster strikes

Of course, not all CEO departures are bad news. In some cases, a leadership change can be beneficial to a company. A new CEO can bring fresh ideas and perspectives and can help to revitalise a company that has become stagnant.

But an exit could also be the incumbent CEO’s strategy of “quitting while you’re ahead,” as branding expert Mark de Grasse calls it.

“By resigning now, they avoid the potential PR nightmare of being associated with declining revenues or plummeting stock prices,” de Grasse said.

“It’s a pre-emptive strike against the dreaded ‘CEO ousted after poor performance’ headlines.”

However, a high CEO turnover rate is still a sign of instability. When CEOs are constantly coming and going, it can be difficult for a company to maintain its focus and achieve its goals.

CEOs endure heightened scrutiny and leadership burnout

A recent study by The Conference Board, in collaboration with Heidrick & Struggles, ESGAUGE, and Semler Brossy, also revealed a growing impatience among boards with underperforming CEOs.

Take the case of Intel’s Pat Gelsinginger for example. He was purportedly asked to choose between stepping down voluntarily or being ousted.

The research indicates a strong correlation between CEO departures and poor company performance. Over 40% of S&P 500 companies that replaced their CEOs this year had a total shareholder return falling below the 25th percentile. This marks a significant increase from 30% in 2017, indicating a growing trend of holding CEOs accountable for lacklustre results.

This heightened scrutiny is likely influenced by the strong performance of the S&P 500 as a whole. When the market is thriving, underperforming companies stand out even more, putting immense pressure on leadership to deliver results. In this environment, boards are increasingly willing to make a change at the top to drive improvement and maximise shareholder value.

Lyndon Taylor, partner at Heidrick & Struggles, aptly summarised the situation: “It’s a clear signal to CEOs: deliver value or face heightened scrutiny.”

The era of patiently waiting for turnaround strategies to bear fruit is waning. CEOs are now expected to demonstrate tangible results and adapt quickly to changing market dynamics. Those who fail to meet these expectations risk facing the consequences – with their jobs on the line.

This trend highlights a shift in the dynamics between boards and CEOs. Boards are becoming more proactive and assertive in holding top executives accountable for performance. Because of this, members of the C-Suite need to deliver or face the possibility of being replaced.

Many leaders are simply burning out.

“The demands on corporate leaders have never been higher. The relentless pace of change, coupled with the weight of strategic decision-making, has led to increased levels of burnout among top executives,” said Aquisha Harris, founder and CEO of consulting firm Aquisha Harris & Co.

“The toll of sustaining effective leadership amid unrelenting pressures has become a prevalent factor in the decision to step down.”

Also Read: Career advice: Should bosses play favourites?

Misconduct in the workplace

While poor performance remains a primary driver of CEO turnover, 2024 has also witnessed a number of high-profile departures stemming from ethical breaches and violations of company policies. CEOs, once seemingly untouchable, are now facing increased scrutiny for their personal conduct, both inside and outside the workplace.

Several cases this year highlight this trend. Alan Shaw, former CEO of Norfolk Southern, was terminated in September after an investigation revealed a consensual relationship with the company’s legal chief, violating company policy.

Similarly, Dan Arnold of LPL Financial Holdings was ousted for unspecified comments to employees that breached the company’s commitment to a respectful workplace.

Challenger, Gray & Christmas reports that, through October 2024, seven CEOs exited their positions due to allegations of professional or sexual misconduct, encompassing issues like financial mismanagement and inappropriate personal behaviour. These instances underscore a growing intolerance for ethical lapses among corporate leaders.

This heightened scrutiny reflects a broader societal shift towards greater accountability and transparency. Companies are increasingly recognising the reputational and financial risks associated with unethical leadership. Moreover, employees and stakeholders are demanding higher ethical standards from those in power.

Consequently, boards are taking a firmer stance against misconduct – demonstrating willingness to take decisive action even when it involves removing high-ranking executives. This sends a powerful message that unethical behaviour, regardless of an individual’s position or performance, will not be tolerated.

The trend of CEOs losing their jobs due to ethical breaches serves as a stark reminder that leadership is not just about delivering results, but also about upholding the highest standards of integrity and conduct. CEOs must be mindful that their actions, both professional and personal, are under constant scrutiny, and any missteps can have significant consequences.

Ultimately, however, boards play the role of an umpire amid all these drastic changes.

As Behbahani reiterated: “Boards will need to double down on their succession planning, focusing not just on the CEO role but their entire C-suite.”