CEOs More Aware of Being Held to Account
CHICAGO -- Chief executive officers are feeling the expectations of performing at higher levels as the economy continues to improve, finds the RHR International 2014 CEO Snapshot Survey.
Fully two-thirds of CEOs said increased stakeholder scrutiny on their performances affects their perceptions of their job security. Last year’s survey found 45% felt such a level of scrutiny.
Further, chief executives are moving away from profitability as their focus compared to earlier years, with 27% of CEOs citing “innovation and product development” as their No. 1 priority over the next six months.
“As the economy improves, companies are feeling healthier than they have in years,” said Thomas J. Saporito, CEO and chairman of RHR International, in a prepared statement. “Attention has moved from issues of survival and stabilization to growth opportunities, and as a result, boards and companies are looking to their CEOs for success. While CEO performance may have gotten a reprieve over the past few years due to the economic downturn, the pressure is now on.”
First-time CEOs are heavily affected by the added pressure of they feel on close scrutiny of their performances, the survey found. They feel more isolated, with 60% of first-time chief executives reporting feelings of isolation related to their role compared to 45% last year. Additionally, 88% of first-time CEOs stated that the isolation they feel is greater than the isolation they experienced in their roles as senior executives.
“CEOs are aware that the responsibility of creating a better future for their companies lies with them,” Saporito noted. “However, they can’t forget about the relationships that helped them get to their position. Chief executives must learn to avoid isolation and establish supportive senior teams as more isolated CEOs tend to fail.”
Other major findings of the survey:
- Concern over CEO-board disagreements is on the rise. There has been an increase in disagreements with their boards. More than a quarter, 27%, of CEOs cited strategy disagreements with their boards as the biggest threat to their tenure, compared to 15% of CEOs in 2013.
- First-time CEOs understand the importance of agile leadership; 65% reported having made changes in their style of leadership in the past six months with the intent of more engaging others more effectively. “Mistakenly, agility and the ability to be nimble can sometimes be seen as less important than ‘nose-to-the-grindstone’ work ethic,” Saporito said. “However, the role of the CEO is becoming more complex and is rapidly changing, requiring agility for success.”
- CEOs want to remain CEOs. Despite the pressure to succeed, 61% of CEOs see themselves becoming the CEO of a different company in the future. “The chief executive position is one that comes with a shorter life expectancy -- i.e., a defined, rather than lifetime, tenure,” Saporito said. “Thus, it makes sense for CEOs to look for new environments, as the end of one position provides the opportunity to fill the demand for effective leadership at a different company.”
RHR International has offices in Brazil, Canada, China, Hong Kong, Germany, Italy, Switzerland, United Kingdom and United States.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email.