As the Covid-19 pandemic enters its second year, one thing is abundantly clear: Not much is moving quickly, and much has slowed down.
The traditional office environment has been disrupted, and so have the traditional business processes, including succession for corporate chief executives.
CEO transitions fell in 2020
In this report from global executive search giant Spencer Stuart, the statistics prove the point. “Globally, CEO transitions fell 42 percent between the first and second halves (of 2020) as the economic strain of the Covid-19 pandemic intensified,” it finds.
A typical phenomenon during recessions
As disruptive as this development may be, it is not at all unprecedented, Spencer Stuart reports. In the past three recessions, for instance, the same phenomenon occurred with corporations postponing their CEO succession plans.
Steepest decline in Asia
Since the pandemic’s early 2020 onset, companies in some global regions have been hit harder than others. “Asia experienced the steepest decline in CEO transitions during 2020, down 23 percent compared with 2018-19 average,” the search firm reports.
Steepest decline in technology in the US
Not surprisingly, there is a direct correlation between the industries most impacted by the pandemic and the delay of CEO successions. In Asia, that proved to be industrial goods, consumer goods, and services. In Europe, it was the healthcare industry. In the United States, it was the technology sector.
30 percent above pre-crisis levels in 2022
Good news, however, does appear on the horizon, Spencer Stuart found. “CEO transitions tend to rebound as uncertainty wanes, often spiking two years after the depth of a crisis…If historical patterns repeat, transitions in 2022 could spike as much as much as 30 percent above pre-crisis levels,” the firm predicts.