Shorter CEO tenures are the new reality

Shorter CEO tenures are a hot topic in corporate governance right now, and will likely remain so in the years ahead, as business priorities shift towards the more immediate. 

You might have seen multiple news articles about this in 2025, each of them pointing to more data which backs up a definitive shift in the relationship between CEOs and the businesses they serve. 

Figures from agencies like Russell Reynolds and PwC reveal that the midpoint of this decade has seen us reach new levels of CEO turnover. Average tenures have slipped towards the seven-year mark among S&P 500 companies, for example. The idea that CEOs are meant to stay in the job for ten or more years and guide the business towards a long-term vision is fading. 

The bottom line is that we expect this trend to continue into 2026 and beyond. The challenges are getting bigger, and the patience among directors is wearing thinner.

The reason behind shorter tenures can get quite subjective if we zoom in too far, but some general issues are fuelling the trend.

We’re not strangers to the fact that long-term planning is far more difficult in modern business. In addition to the lack of clarity, many firms simply don’t have the capacity to focus that far ahead with such pressing challenges in the here and now. 

At the moment, the main hurdles are specific and immediate. Boards and bringing in CEOs to overcome those hurdles. How long they stay isn’t as important as their ability to accomplish their specific, shorter-term goals. 

Examples of hurdles include today’s chaotic geopolitical landscape, which seems to prompt the use of the word “unprecedented” with each passing news cycle, the evolution of AI, and the volatile nature of supply chains and regulatory demands. 

Each of these issues demands a fresh perspective in leadership.

In today’s environment, there’s no more “honeymoon” period for CEOs. Regulators are demanding more with thicker rulebooks, while the threat from activist investors has continued to rise in 2025. It comes down to CEOs needing to provide results almost immediately. Any indication that they’re struggling, or that their vision simply doesn’t match with reality, will prompt all kinds of negative responses in the boardroom and further afield, as directors worry more about upsetting stakeholders.

An extension of the above, the rapidly growing capabilities from innovations like AI are also heaping pressure on CEOs. They must now demonstrate that they have enough knowledge and foresight to have a firm grip on the new opportunities thrown at them. If they can’t act on those opportunities (which never stick around for long), it will prompt the same kind of worry in the boardroom.

It varies with industry, size and location, but there is a general upswing in the number of CEOs brought in as external hires. They bring fresh perspectives and, pivotally, key expertise needed to deal with some of the challenges mentioned above. One key knock-on effect of this, however, is that external hires tend to push the average CEO tenure down.

We have to accept that shorter CEO tenures are a solid reality. We know the factors feeding the trend, and we know they won’t be going away any time soon. International relations remain fraught with repeated standoffs, AI and other innovations continue to disrupt, and activists and regulators aren’t relaxing their drive for increased control. It’s not an environment for the long game. It’s about shorter bursts of dedicated work – a “sprint” mentality. 

The traditional concept of a CEO as a long-term steward of a legacy is being replaced by the CEO as a high-impact, short-term tactical leader.

It’s natural that this trend might cause you to rethink your own board’s approach to CEO approval, and in many cases, that might be well warranted. If you decide that your priorities are shorter-term, here are some tips:

• Embrace the “tactical hire” factor behind many new CEO appointments. Bring somebody on board for their ability to steer your company through specific challenges that need urgent attention over the next few years. 
• Keep an eye on things. Bringing in someone to meet specific challenges means there has to be constant evaluation. Are they doing their job? Do they need supports? Have things changed enough that their original goal has shifted completely? Focusing so much time and energy on one issue means you need to constantly make sure it is worthwhile. 
• Plan for the end. You might bring somebody in to address a challenge that seems years away from abating. That’s normal. However, you should still plan for the eventual transition now. Say your problem is the chaos caused by tariffs. Sooner or later, there will be a new normal in this arena, and you’re going to have a judgment call to make about your CEO and their future. No matter what, succession planning will matter.

It could easily be the case that your company might benefit from the kinds of CEO appointments that contribute to shorter tenures. The pivotal thing is always to ask whether it applies to your company. 

Does your board know enough about its current challenges, and if so, are you likely to want (or end up with) a shorter-term CEO? Many directors will trip up here because they don’t translate the macro-trends into on-the-ground impacts for their company.