Australian CEOs are managing to keep their jobs longer.
The tenures of chief executives at ASX200 companies have edged above the global average for the first time in five years, according to analysis by PwC.
The median has risen to 5.5 years in 2015 from 4.2 years in 2012 and, for the first time since 2010, it is now greater than the global median of 5.3 years.
“Australia had the greatest rate of CEO turnover in the world four years ago so this is a significant improvement in tenure — up more than 30% since 2012,” says Varya Davidson, a PwC partner.
The annual study of chief executive succession reveals two key factors driving tenure: greater representation of incoming CEOs who have been promoted internally; and improved succession practices.
The number of CEOs promoted internally rather than coming from outside reached an all-time high in Australia in 2015. In the last four years, 76% of incoming CEOs were insiders when the change in management was forced.
“We are now seeing a clear preference for a tried and tested appointee into the top job in Australia,” says Davidson.
“Historically, we’ve appointed a greater proportion of outsider CEOs than our global counterparts, but the difference is lessening.”
In Australia, insider CEO appointments tend to stay for longer and achieve greater and more consistent shareholder returns than their externally hired colleagues.
The number of incoming female CEOs in Australia remains low and has stagnated over the past year despite tripling since 2013 — from one to three.
However, the female Australian CEO representation at 9% still beats the low global average of 3% of incoming hires which saw a decrease from 5.2% in 2014.
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