Why CEO Effectiveness Starts to Decline After Just a Few Years

The average optimal CEO tenure is just 4.8 years, according to a Harvard Business Review article by Xueming Luo of the University of Texas at Arlington and two associates. The study of 356 U.S. companies shows that after a while, CEOs become entrenched and favor avoiding losses over pursuing gains, and their attachment to the status quo makes them less responsive to customer preferences. Long-tenured CEOs are, however, highly skilled at maintaining good employee relations, the researchers say.

Source:Long CEO Tenure Can Hurt Performance

Nick Kalikajaros 2017