Board Termination of the "Unethical CEO" -
An important new study concludes that CEO terminations for ethical lapses (as a percentage of overall CEO successions) has dramatically increased over the last five years. The study also reflects the willingness of boards to reclaim compensation from so called "unethical CEOs.”
The survey results are suggestive of a growing climate of accountability in corporate boardrooms across the globe. Boards are now more willing to terminate CEOs for conduct they regard as unethical or otherwise inconsistent with corporate values. This is a notable consideration for both the board, and its executive compensation and search/succession committees, and the standards they apply to monitor and evaluate senior executives. This, as boards seek to balance appropriate levels of executive accountability with the benefits of maintaining a close relationship with the CEO, and collaborate with the CEO to encourage entrepreneurship and informed risk-taking.
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