The C-suite has seen a significant shake-up in the first half of 2023, with 37 board departures at the largest U.S. companies. This represents a 20% increase compared to the same period last year. The departures include high-profile executives from companies such as Amazon, Apple, and Alphabet.
Several factors are driving this trend, including the increasing pressure on boards to improve performance, the rise of activism investors, and the changing nature of the workforce.
Pressure to improve performance
Boards are under increasing pressure to improve performance in the face of rising shareholder expectations and global economic uncertainty. This pressure is leading to a greater focus on board composition and the need for directors with relevant experience and skills.
Rise of activism investors
Activism investors are playing an increasingly significant role in corporate governance. These investors often push for board changes as a way to improve the company's performance. In H1 2023, activism investors were involved in several high-profile boardroom battles, including the campaigns at Macy's and Bed Bath & Beyond.
Changing nature of the workforce
The changing nature of the workforce is also having an impact on board composition. As more women and minorities enter the workforce, there is a growing demand for diversity on corporate boards. This demand is being driven by both investors and employees who want to see their interests represented at the highest levels of the organization.
The departures of the 37 board members in the H1 2023 period are a reflection of these trends. Companies are increasingly seeking to improve their performance, respond to the demands of activism investors, and reflect the changing nature of the workforce.
Sector-wide breakdown
The departures were spread across a variety of sectors, with the technology sector accounting for the largest number of exits (10). Other sectors with a significant number of departures include healthcare (7), consumer discretionary (6), and financials (5).
Notable departures
Some of the most notable departures in the H1 2023 period include:
- Jeff Bezos (Amazon)
- Tim Cook (Apple)
- Sundar Pichai (Alphabet)
- Jamie Dimon (JPMorgan Chase)
- Warren Buffett (Berkshire Hathaway)
These departures are a sign of the changing times in corporate governance. Boards are under increasing pressure to improve performance and are increasingly turning to new and diverse talent to help them meet these challenges.
Implications for boards
The departures of the 37 board members in the H1 2023 period have several implications for boards. First, it highlights the importance of board composition and the need for directors with relevant experience and skills. Second, it shows that boards are increasingly willing to make changes in response to pressure from investors and other stakeholders. Third, it suggests that the changing nature of the workforce is having an impact on board composition.
Boards that are able to adapt to these changes will be better positioned to succeed in the future. They will need to be more diverse, more responsive, and more focused on performance.
Conclusion
The departures of the 37 board members in the H1 2023 period are a sign of the changing times in corporate governance. Boards are under increasing pressure to improve performance and are increasingly turning to new and diverse talent to help them meet these challenges. Boards that are able to adapt to these changes will be better positioned to succeed in the future.
