India Inc is witnessing a sharp rise in CEO exits, with 141 managing directors (MDs) and chief executive officers (CEOs) resigning in FY25 across 2,590 NSE-listed companies.
This marks a significant increase from 119 exits in FY24 across 2,279 companies, according to data compiled by Primeinfobase.
The trend is not confined to publicly listed firms and is also affecting other business sectors.
Family-owned businesses, unlisted multinational corporations (MNCs), private equity (PE) and venture capital (VC)-backed companies, and startups are also experiencing similar CEO departures.
Factors Driving CEO Exits
Experts attribute the surge in CEO exits to multiple factors:
- Talent Scarcity: Companies are struggling to find qualified leaders, leading to cross-industry movements.
- Rising Board Expectations: Boards and shareholders are less tolerant of underperformance, increasing pressure on CEOs.
- Global Uncertainty: Economic volatility, geopolitical tensions, and market fluctuations are making leadership roles more challenging.
- Increased Scrutiny: CEOs face higher accountability, with shorter timeframes to deliver results.
Industry-Wide Impact
The trend is reshaping leadership dynamics across sectors:
- Listed Companies: NSE-listed firms are witnessing record CEO turnover, with a significant rise in departures. In the March quarter of FY25, 41 CEOs exited, compared to 23 in the same period last year.
- Startups & PE-Backed Firms: Investor activism and performance-driven metrics are pushing CEOs out faster.
- Family-Owned Businesses: Traditional firms are replacing leadership to adapt to modern business models.
CEO Exits: Expert Opinions
Leadership advisory firms highlight the changing nature of CEO appointments:
- K Sudarshan, MD of EMA Partners India, notes that CEOs are now high-stakes appointments, with more involuntary exits due to shorter performance cycles.
- Pankaj Arora, MD of Russell Reynolds Associates, attributes CEO churn to new business models, AI adoption, and India’s growing appeal as an investment destination.
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