By Staff writer
New research shows that Middle East CEO succession rate is one of the highest in the world last year
More than a fifth of the 62 largest Middle East-based corporates changed their CEO during 2015, one of the world's highest succession rates, according to new research.
The study by Strategy& said 21 percent of regional bosses took the helm last year, compared to 17 percent globally.
The vast majority (84 percent) of these cases had planned CEO succession events from outside the company, the report showed.
It added that the high succession rates in the Middle East are the result of above average CEO transition rates in Saudi Arabia where 38.5 percent of corporates chose to introduce a new CEO in 2015.
Per-Ola Karlsson, partner with Strategy&, formerly Booz & Company, said: "This growing trend is mostly due to recent political and economic movements, including a recent change in the country's leadership and ongoing oil price volatility, which has led to a shift in how Saudi Arabian leaders think about, approach and successfully execute the new agenda of the country and where several private sector CEOs have taken on Ministerial or other senior roles in the government."
Additionally, the study said that during the last four years 58 percent of all CEOs in the Middle East have been outside hires, up from 33 percent in the previous four year period.
Globally in 2015, 17 percent of the largest 2,500 public companies changed their CEO, more than in any of the previous 16 years of the CEO Success Study.
It said more big companies have been deliberately choosing their new CEO from outside of the company as part of a planned succession, an indication that hiring an outsider has become more of an intentional leadership choice than a necessity.
Outsiders accounted for 22 percent of all CEOs brought in via a planned succession between 2012-2015, up from 14 percent in 2004-2007.
The majority of companies have continued to promote insiders to the CEO position and the study said this will remain the preferred succession-planning practice.
"Hiring an executive from outside a company to serve as chief executive officer used to be seen as a last resort. That is not the case anymore with the disruptive market-related changes that companies are facing today," said Karlsson.