Australia likes to change its top CEOs more often

Deborah Thomas, CEO. Lisa Maree Williams/Getty Images

Turnover of CEOs at Australia’s ASX 200 companies is more than one third higher than the global average, according to analysis by PwC.

In 2014, 35 of the ASX 200 companies changed their chiefs, almost 35% more than the global average, according to PwC’s 15th annual study of chief executive succession.

“Whilst Australian companies have shown an improvement in the ability to plan succession for the top job against the long run Australian average, Australian boards are still being forced into CEO-separation more than global boards,” says PwC.

The changes in 2014 included eight unplanned CEO departures which cost $8 billion in shareholder value,

PwC calculates these companies lost their shareholders 5.5% in value leading up to the departure and another 11.4% one year later. This is between two to three times more erosion in shareholder value than top global firms.

Local Australian CEOs last an average of five years in the job. They are replaced by the youngest globally, with a median age of 51.

However, the number of incoming female CEOs in Australia is still low despite tripling since 2013, from one to three. But they are arriving at a faster rate than the rest of the world. The number of female Australian CEOs at 8.3% still beats the global average of 5.2% of incoming hires.

“This continues the trend we observed in last year’s study of a slowly increasing share of female CEOs in Australia, which remains at unfortunately low levels,” says report co-author Varya Davidson.

There were 10 female CEOs in 2014: Nerida Caesar (Veda Group), Sue Channon (Virtus Health), Tracey Fellows (REA Group), Gail Kelly (Westpac), Susan Lloyd-Hurwitz (Mirvac Group), Amanda Lacaze (Lynas Corp), Katie Page (Harvey Norman), Kerrie Mathers (Sydney Airport), Andrea Sutton (Energy Resources of Australia) and Alison Watkins (Coca-Cola Amatil).

This number has held steady in 2015 with the retirement of Gail Kelly from Westpac in February and Deborah Thomas joining the list in March as CEO of Ardent Leisure Group.

The study doesn’t account for prominent female business leaders who aren’t CEOs of listed companies. These include Mailie Carnegie of Google Australia and Pip Marlow at Microsoft.

The Australian component of the global PwC study identified all companies listed in the ASX 200 since 2000, a data set spanning 341 companies.

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