Corporate boards should not shunt CEOs out prematurely

Today's challenges are steep, but frequent CEO changes won't help

- BETH KOWITT

When Unilever made its surprise announcement last week that it would replace chief executive officer (CEO) Hein Schumacher, the board was about as blunt as boards tend to get in a corporate press release. "While the Board is pleased with Unilever's performance in 2024, there is much further to go to deliver best-in-class results," said Unilever chairman Ian Meakin in the announcement. Schumacher will be replaced by current Unilever chief financial officer (CFO) Fernando Fernandez, who has the ability "to drive change at speed" and capitalize on the company's growth plan "with urgency."

It all came down to that one word, much beloved by Wall Street: urgency. In the end, the board decided that if Schumacher was not going to move fast enough, it would. Just 20 months into his tenure, Schumacher was out.

It's not fun for a board to replace a chief executive, which is why CEOs often hold onto their jobs longer than they should. Big transitions can open up a company to big risks, and a board never quite knows how chief executives will perform until they're in the chair.