According to data from NSE-listed companies as many as 58 MDs or CEOs who were also on the boards quit in the first seven months of 2019. The data was compiled by Prime Database’s nseinfobase.com. The data on the exits of chief executives and managing directors suggests it is because of outgrowing performance pressure from the board. In 2018, as many as 108 CEOs or MDs left the offices.
According to experts reasons such as increased scrutiny on performance and ethics, declining tolerance for underperformance at the highest level, the stress across sectors are contributing the exit of the high profile professionals. Most of the exists are resignation. Harsh Mariwala, the chairman of consumer goods firm Marico told to Economic Times that business environment has become far more challenging. “The job of a CEO is getting more and more difficult,” told to Economic Times.
Although the remuneration is on the hike the pressure of performance and stressful work environment are making the job of CEOs tougher. “There’s a lot of pressure on company CEOs, not just from the board but also from investors and shareholders. If you’re not performing at par, you have to step down,” told Pranav Haldea, the managing director at Prime Database Group to Economic Times.
Amit Tandon, the managing director of proxy advisory firm Institutional Investor Advisory Services told to Economic Times that the tenure of CEOs is shrinking. He said it is because of a lot more are expected from them. Moreover, many of them are trying to explore entrepreneurship is also a reason.
“Sometimes, a wrong hire could be a wrong decision and whoever was responsible for the hiring would be accountable for that. But if a mistake happens, it’s better to disengage soon than allowing it to continue,” added Mariwala of Marico.