CHICAGO, April 4, 2011 /PRNewswire/ -- A study of S&P 500 non-financial companies over 20 years (1988-2007) shows that those companies that exclusively promote CEOs from within outperform companies that recruit CEOs from outside the company. The study identified 36 companies that exclusively promoted CEOs from within their own ranks over this 20-year time period and found that these companies outperformed other companies across seven measurable metrics: return on assets, equity and investment, revenue and earnings growth, earnings per share (EPS) growth and stock-price appreciation.
Paul A. Laudicina, chairman and managing partner of A.T. Kearney, commented, "Boards of directors often fail when it comes to CEO succession planning. Rather than focus on leadership development and creating a qualified stable of internal CEO candidates, boards too often end up going outside the organization to fill the top spot. Unfortunately, their stakeholders more often than not pay a big price for their star search."