Bosses can boomerang too — but that doesn't mean they should, Bloomberg reported Oct. 26.
The publication analyzed data from six publicly traded companies that "boomeranged," or reappointed successful past CEOs over the last three years. Analysts found that although a former leader's return can steady or even temporarily raise stocks in the short term, these CEOs are unlikely to renew lost gains over time. Collectively, the six companies — Dollar General, Walt Disney Co., Starbucks, DuPont de Nemours, Bausch & Lomb and Stitch Fix — lost $88 billion in market value in the six months before their reappointment announcements and had only recovered $10 billion half a year later.
Even if they aren't entirely effective, the high number of reinstatements illustrates how difficult it can be to move away from a tenured CEO, according to Bloomberg. This is true amid high turnover in the healthcare industry: over the past year, a number of hospital CEOs have left retirement to guide their former organizations through difficult times.
The presence of a boomerang CEO may also indicate a shallow executive screening process, per the publication.
"Every boomerang CEO is a failed succession," said Elena Botelho, a partner at leadership advisory firm ghSMART.
Read more about boomerang employment in the healthcare industry here.