Antonio Horta-Osorio, Chairman of Credit Suisse, a Swiss bank, and former CEO of Lloyds,
a British bank, has been forced out. His sin: a trip to Wimbledon in breach of Covid rules.
It used to be almost inconceivable that senior business leaders would be forced out for
anything other than failing financial performance. Things have changed.
Here is a short extract from the book:
‘The changing landscape is also reflected in what boards and shareholders expect from
senior business leaders. Kearney, a consulting firm, undertook an Australian study
comparing reasons for 300 chief executive departures from ASX-listed companies across two periods – April 2011 to March 2016 and April 2016 to March 2021. The number of
involuntary exits increased by 27 per cent over the two periods. The number of involuntary
exits for non-financial/ Environmental, Social and Governance (ESG) reasons rose almost
fourfold. By the end of the period, non-financial reasons accounted for 37 per cent of all
involuntary exits. A similar study by PwC found that in 2018 ‘ethical lapses’ for the first time
overtook exits for financial performance.’
What all this implies is that the role, and expectations, of Chairmen and CEOs is changing
fundamentally. Financial performance is now simply a basic requirement. Performance on
other parameters – what could be described as their political role as the public face of their
companies – is gaining more prominence.
But more of that in a later piece.