Only 12 new CEOs were women — just 3.6 per cent of the total — but the figure marks a continuous gradual improvement. Image Credit: Agency

Dubai: Middle East companies are moving closer to global norms of corporate governance, Strategy&’s latest CEO Success study indicates.

The firm (formerly Booz & Company) analysed 2,500 leading public corporations around the world over the past 10 years. Company partner Per-Ola Karlsson, leader of its strategy and leadership practice in the Middle East, says the period of time and the number of data points throws up interesting trends.

One of the key findings of the current report is an increase on the number of CEOs let go for “ethical lapses” — not necessarily their own, but within their organisations, Karlsson said. Globally, the number rose from 3.9 per cent of changeovers in the period 2007 to 2011, to 5.3 per cent in 2012 to 2016.

In the US and Canada, the proportion doubles, from 1.6 per cent to 3.3 per cent, with Europe rising from 4.2 per cent to 5.9 per cent and BRIC nations from 3.6 per cent to 8.8 per cent.

Speaking to Gulf News over the phone, Karlsson said he did not believe that the rise in ethics-related changeovers was a result of more unethical practices, but of better governance, more public exposure and less public tolerance for infractions.

“This forces boards to take action that perhaps they should have taken five years ago, but did not,” he said.

Planned successions

Worldwide, 14.9 per cent of companies changed CEOs in 2016, compared to 15.7 per cent of Middle East companies – and indication that the region was moving closer to global norms, Karlsson said.

All of the Middle East’s 8 changeovers were planned successions, he added. Globally, 80 per cent of changes were planned, and 20 per cent were forced.

Karlsson noted that only 12 new CEOs were women — just 3.6 per cent of the total, a figure Karlsson described as “embarrassingly low”. Nevertheless, it represented a continuous gradual improvement, he said. Strategy& predicts around a third of incoming CEOS will be women by 2040.