But fewer turnovers are expected this year as companies begin to recover from the downturn, the Booz & Company CEO Succession Study has found.
The financial services industry and property trusts were the most affected sectors, the survey revealed, counting for nearly 50% of all departures during 2008 and 34% of chief executive transitions. The financial services industry was most affected by the global downturn, with several major companies collapsing including Storm Financial and Opes Prime.
The study found the rate of departures increased to 22% during 2008, with 50 chief executives in the ASX200 leaving their positions compared to 36 in 2007 - the highest number since the survey began in 2000.
Forced departures accounted for a record 40% of all turnovers, a level higher than during the 2001 dotcom crash, the company said. About 44% of the departures were planned, up from 12% in 2007, and another 16% related to mergers, down from 29%, the survey found.
The annual study, which measures the rates of executive turnover across the world and among the Australian ASX200, also found that Australian turnover rates were much higher than in the US and Europe, with departures in those areas falling 0.5% and 1.9% respectively.
The study also noted a trend to hire from within companies, with 74% of new appointments coming from existing board members or executives.
But that move seems to be a successful one, the survey found, with departing chief executives who had been hired from within delivering higher shareholder returns over their employment, delivering an average 1.7% return against a 14.9% decline from external hires.
Additionally, the average tenure of chief executives forced to depart during 2008 increased from 6 years to 6.7 years, which the survey said "supports the conclusion that local boards were quick to show even long-serving CEOs the door when they were perceived to have underperformed".
Booz & Company principal Phil Mottram said in a statement it was "surprising" Australian companies managed to avoid the worst of the global downturn but recorded higher turnover rates than countries more exposed to economic decline.
"But closer analysis of industry sector findings shows the increase in Australian CEO turnover was driven by the sharp rise in forced departures in financial services and property trusts - both at the pointy end of the credit crunch," Mottram said.
"Globally, unusually high CEO turnover in financial services, as well as energy, was offset by greater than normal stability in recession-resilient industries such as utilities and consumer staples, so the rate of CEO departures globally was lower than in Australia."
Mottram noted companies are more willing to change out under-performing leaders even during a downturn, and the trend of hiring internally is "beginning to bear fruit".
"This is consistent with other Booz research showing that selecting the right internal candidate for a senior appointment can accelerate the benefits to the enterprise by three to five years."
The study also found that the average global succession rate of the world's top 2,500 listed companies was 14.4%, a slight increase from 2007.
Additionally, incoming chief executives were found to be twice as likely to have had previous chief executive experience, while rates of forced departures at financial services and energy companies around the world were up 159% and 107% respectively.
