Stability or ambition? Here is what Indian corporate CEOs prioritise

Amid shifts in corporate leadership, Indian CEOs seem to be favouring consistency over rapid change

Over the past five financial years, there have been fewer exits of chief executive officers (CEOs) from Indian corporates compared to the preceding five years, according to a new report.

A report by The Economic Times highlighted a trend of CEO stability within Indian companies, showing an 18.75 per cent decline in CEO exits. In the 2015-2019 period, a total of 144 CEO exits were recorded.

Why are fewer CEOs leaving?

The report, based on an analysis of BSE 200 companies, was carried out by global executive search and leadership consulting firm EMA Partners India. Titled CEO Shelf-Life Study 2020-2024, the report found that companies’ focus on long-term growth and stability has contributed to maintaining consistent leadership.

The study reveals sector-specific trends in CEO departures, showing that industrial and manufacturing companies logged the biggest drop at 46.15 per cent. Additionally, due to the Covid-19 pandemic, many boards prioritised business continuity and avoided leadership changes.

What is the sector-wise trend?

K Sudarshan, regional chair, Asia, and managing director, EMA Partners India, told The Economic Times that some companies experimented with hiring outsider CEOs, but when this did not work out, they preferred promoting leaders from within the organisation.

The data on sector-specific trends showed that in the financial services sector, 39 CEOs exited in the last five years, compared to 44 in the preceding five-year period. In the energy sector, CEO exits remained constant at 28. Meanwhile, the industrial sector saw a decrease in CEO departures, dropping from 26 to 14.

In the pharma sector, CEO exits decreased from seven to five, while in infrastructure, the number fell from eight to two. In the tech sector, the number declined to 10 from 13. However, in consumer services, CEO exits increased slightly from 12 to 13, bringing the total exits across sectors to 117 in the past five years.