If it feels like c-suite professionals are playing musical chairs lately, you’re not imagining things. We are seeing a lot of movement in CEO and CFO roles, in particular. However, the reasons behind this shift are as varied as they are intriguing. From mismatched company cultures to the intense scrutiny top leaders face, the forces driving this trend are worth paying attention to. Here’s our breakdown. 

Culture: A Make-or-Break Factor for C-Suite Success 

Cultural fit can make or break an executive’s tenure. Adriana Cowdin’s article, Why Culture Matters: The Bottom Line and Top Line Impact for Executives, puts it plainly: cultural misalignment is a top reason why leaders leave. Companies with a strong, cohesive culture perform better financially and create environments where leaders can thrive. The Corporate Executive Board’s research shows that up to 70% of executives fail within 18 months due to cultural misfit. Cowdin says it best: “Executives moving into new roles must assess and align with an organization’s culture to succeed. Misalignment can lead to early exits, reputational risks, and missed opportunities for impact.” 

A Record Year for CEO Departures 

2024 was a banner year—but not necessarily in a good way—when it came to CEO turnover. Challenger, Gray & Christmas reported over 1,800 CEOs have left their roles this year. That’s a 19% jump from the previous period and the highest number since they started tracking these figures in 2002. An article from People Matters Global outlines the culprits: underperformance, burnout, and ethical breaches. Constantine Alexandrakis, CEO of Russell Reynolds Associates, sums it up: “The to-do list for any new CEO is now much larger.” Leaders are juggling economic uncertainty, social issues, and long-term growth strategies, making the job more demanding than ever. 

CFO Turnover: A Strategic Hiccup 

CFOs aren’t immune to this trend.  Fortune’s Sheryl Estrada highlights the impact of CFO turnover on M&A activities and succession planning. According to Deloitte’s Q2 2024 CFO Signals survey, about one in four CFOs said their organizations lack a formal succession plan. As Deloitte’s Steve Gallucci explains, “As the role becomes more complex, it’s becoming more and more challenging to cultivate a neat succession plan.” CFOs today are expected to wear many hats, from being strategic thinkers to tech-savvy leaders, which complicates the hiring and onboarding process. 

Burnout and Intense Scrutiny 

Leadership burnout is another major factor. Aquisha Harris, CEO of Aquisha Harris & Co., points out that “the relentless pace of change, coupled with the weight of strategic decision-making, has led to increased levels of burnout among top executives.” Add to that the intense scrutiny from boards and stakeholders, and it’s no wonder so many leaders are stepping down. A study by The Conference Board revealed that over 40% of S&P 500 companies replacing their CEOs last year had poor shareholder returns (below the 25th percentile), further intensifying the pressure on top executives to deliver results fast. 

Striking a Balance Between Retention and Innovation 

While some industries grapple with high turnover, others are experiencing what’s been dubbed “The Great Stay.” John Bremen’s Forbes article, The Great Stay: Can Turnover Rates Get Too Low?, warns about the risks of stagnation when turnover dips too much. Leaders in these industries need to foster innovation and revisit their compensation and benefits strategies to keep things dynamic. As Bremen puts it, “Effective leaders work to better understand turnover trends in their organizations and markets, and intentionally create continuity and engagement without stagnation.” 

Leadership Requires Adaptability

With C-suite turnover on the rise, businesses need to get ahead of the curve. Prioritizing cultural alignment, crafting solid succession plans, and offering leadership coaching are more important than ever. These steps won’t just help mitigate the risks of turnover; they’ll also pave the way for a sustainable leadership team. The challenges are real, but for proactive leaders, so are the opportunities. 

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