Sarin's 5-year term below average CEO tenure

NEW DELHI: British telecom giant Vodafone's Indian-origin CEO Arun Sarin, who announced his surprise resignation yesterday, has fared worse than the global average when it comes to the tenure of person as chief of a company.

However, his five-year stint as CEO of the world's top mobile operator appears noteworthy, given telecom being the industry with highest CEO departure rate and Europe faring the worst on this parameter among all the geographic regions.

According to the latest annual study of CEO turnover rate by the global management consultancy firm Booz & Company, the global median tenure for a CEO who left office in 2007 was six years -- same as in 1995 and the average over past 10 years.

CEOs in the North America had the longest average tenure of 8.3 years in 2007, as compared to seven years in Europe. "Europe offers the toughest environment for CEOs, while North American CEOs have the longest tenure," it said. The survey also found that CEOs are seldom dismissed for poor short-term results.

While announcing his decision to step down as Vodafone CEO in July, Sarin said in London yesterday that he had achieved what he had sought to at the UK telecom giant. The company has not disclosed any specific reason for Sarin's exit, but his tenure has been marked with some intense shareholders' dissent. At the company's AGM in 2006, over 10 per cent votes had been cast against his continuation as CEO.

The Booz survey of the world's 2,500 largest publicly traded companies, whose release coincides with Sarin's resignation, found that the CEO turnover declined slightly in 2007, but remains at a high level. The study is being published in the Summer 2008 issue of Booz & Company's quarterly magazine strategy+business, hitting the newsstands on June 10.