Editor's Viewpoint - Appointing a CEO: Age Ain't Nothin' But a Number
How long is a satisfactory term for a CEO?
Of course, there's more than one answer to this question: What if the company is publicly-listed? Or if it's a privately-held firm. Of course, there is the small matter of how a company – irrespective of ownership structure – is performing. If a business has a struggle on its hands, then its understandable if a CEO's tenure is cut short. Then, there's retirement to factor in.
The reason I ask is that the announcement last week that Bacardi's president & CEO is leaving the firm highlights a trend within the family-owned company to lose its head after less than four years. Ed Shirley came on board in March 2012, replacing Seamus McBride, who took the reins in September, 2008.
McBride had himself taken over from Andreas Gembler, who started in the position in June 2005.
So, Shirley lasted a shade over two years, McBride was there for three-and-a-half years, with Gembler holding the hotseat for three years and three months.
All three took retirement when they left Bacardi.
Granted, Shirley was only 55 when he assumed the leadership of Bacardi, so one could be forgiven for thinking he'd stick around for a bit longer than two years. But, he'd already retired once; in May 2011, he stepped down at Procter & Gamble.
He came out of retirement to join Bacardi.
The role of CEO is, in theory at least, integral to the performance of a company, and I doubt there's anyone in the business world that doesn't believe that continuity and calm at the top are vital for a firm to thrive. That, after all, will be Pernod Ricard's argument, I'm sure, when Alex Ricard takes the helm next year, at the age of 42.
Want another example? How about Paul Walsh at Diageo? He stepped down last year after 13 years as CEO, having been 45 when he started in the role.
There can be no questioning the calibre of the leaders that Bacardi has recruited in the last decade, but is age – and one's proximity to retirement – part of the recruitment criteria?
It certainly looks like it.
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