BCG: Why CEO Tenures are Contracting Amid Rising Pressure

​​​​​​​The tenure of chief executives is contracting, with leaders facing mounting pressure to deliver results in shorter timeframes.

Research from Boston Consulting Group (BCG) indicates that the average tenure for an outgoing CEO in the first half of 2025 was 6.8 years. This figure represents a decrease from 7.7 years during the same period in 2024 and marks the lowest average since data tracking began in 2018.

The findings, based on a Russell Reynolds report analysing leadership changes at over 1,800 public companies, suggest a fundamental change in expectations at the highest level of corporate leadership.

As Judith Wallenstein, BCG Managing Director and Senior Partner, explains: “CEOs today feel enormous pressure. They have dramatically less time to show real, tangible value creation.”

This compressed timeframe for demonstrating value is reshaping the role and creating new challenges for boards and executive teams.

The pressure is not only to perform but to do so quickly and decisively in an increasingly complex global market.

Intensifying pressures and shareholder expectations

The trend towards shorter CEO tenures is caused by a combination of external pressures and rising internal standards.

According to BCG, the market environment has become “increasingly unforgiving” due to geopolitical uncertainty, evolving trade dynamics and the rapid disruption caused by technology, particularly AI.

Alongside these external factors, CEOs are subject to greater scrutiny from boards and shareholders who hold them to higher standards of performance. This heightened accountability is reflected in the data.

In 2024, 42% of CEO transitions in the S&P 500 occurred at companies where total shareholder return (TSR) was in the bottom quartile.

According to a report by The Conference Board, ESGAUGE, Heidrick & Struggles and Semler Brossy, this is a notable increase from 30% in 2017.

While this trend is not uniform globally, with regions like Asia-Pacific often seeing longer tenures due to the prevalence of large family-owned businesses, the overall direction points towards declining board patience and pressure that extends across the entire executive leadership team.

Reshaping the executive team

Newly appointed CEOs often seek to build their own leadership team to advance their agenda, yet change happens more slowly than might be desired.

Research from BCG in 2025 found that fewer than half of executive team members are typically replaced within the first 30 months of a new CEO’s tenure.

This inertia can be a significant hurdle for a leader under pressure to deliver rapid results.

Judith notes the importance of making decisive changes, sayin: “Our research [a 2020 analysis of the tenures of 7,000 CEOs worldwide] finds that, among CEOs taking over underperforming companies in particular, those who were more aggressive about implementing change in the executive ranks got better results.”

High-profile, short tenures highlight this dynamic. At Unilever, Hein Schumacher stepped down after 18 months, with the board reportedly feeling the pace of transformation was not fast enough.

He was replaced by an internal candidate, Fernando Fernandez. At Starbucks, Laxman Narasimhan’s 17-month tenure ended in August 2024. Starbucks then appointed an external candidate, Brian Niccol, a move that BCG suggests signals an increased appetite for transformation in a challenging market.

Succession planning and the role of HR

These swift CEO exits create what BCG describes as both “major opportunities and responsibilities” for senior leaders and their organisations. For boards and human resources leaders, the trend necessitates a more dynamic and continuous approach to leadership planning.

Succession planning can no longer be a periodic exercise but must become an ongoing strategic conversation to ensure stability and readiness for transition at any moment.

HR leaders have a critical role in this new environment by identifying and developing a pipeline of future leaders from within the organisation.

For executives aspiring to the top role, the focus must be on developing broad talent, building trust with stakeholders and thinking beyond the confines of their own business unit.

The partnership between the CEO, the board and HR leadership becomes paramount in navigating this era of accelerated turnover.

Judith says: “In an era of shorter tenures, a strong partnership between the CEO and both their board and HR leadership increases the probability that the company will succeed.”

In a time of such rapid change, the strength and resilience of the entire leadership team, not just the individual at the helm, will ultimately set successful companies apart.