Executive rates of failure continue to progress at an unacceptable level; estimates range from 20-60% in the first 18 months. Around a third of CEO turnover is forced and in Australia, despite a relatively buoyant response to the Global Financial Crisis, forced turnover is higher than in Europe and North America. Over the past decade, the amount of CEO turnover linked to infighting with the Board has more than quadrupled.

The negative effect of this turnover upon operational and financial performance of publicly listed Organisations is well documented.

Many organisations continue to make poor Executive appointments – often blindly accepting the status quo. When executives fail, many refer to ‘unforeseeable factors’, the current business climate or evolving Executive role challenges.

Often however, Executive failure is due to a focus upon the wrong information or lack of data when making selection decisions. The process used to appoint Executives in most instances is weak: opinion based, biased, and fails fundamental requirements for effective selection. Most organisations’ processes to hire their graduates are more rigorous than that used to select their CEO. Over half of organisations do not even have a profile of required experience, skills and competencies for their CEO – how then can anyone accurately assess their suitability?

Cumulative research since the 1970s supports the fact that interviews, search-firm recommendations, track record and references are not the most reliable or appropriate selection methods – yet even Blue Chip Organisations still rely upon them at the senior level. Moreover - organisations that rely upon the recommendations of Search Firms for Executive appointments have not recognised a direct conflict of interest - a company selling you human capital cannot be objective in their assessment - due diligence cannot be achieved.
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