Accounting Ratios

Management Tenure

We penalise companies where management of board tenure (CEO, CFO, Executives and Board Members) is either too short or too long relative to peers. If the average tenure is too short, we assume a lack of experience whereas if it is too long, we assume complacency.


CEO: Bloomberg only has data on 33% of the 16,000 companies in our global sample, mainly in developed markets such as the US, Japan and the UK. The median average tenure is 4.5 years, with the bottom 20th percentile being 1.4 years and the 80th percentile being 11 years. As such, anything below 1.4 years or above 11 years triggers a red flag.

CFO: Bloomberg only has data on 4% of the 16,000 companies in our global sample. The median average tenure is 3.3 years, with the bottom 20th percentile being 1.1 years and the 80th percentile being 8.3 years.

Executive director: Bloomberg only has data on 20% of the 16,000 companies in our global sample. The median average tenure is 7.4 years, with the bottom 20th percentile being 4.1 years and the 80th percentile being 12 years.

Board tenure: Bloomberg only has data on 22% of the 16,000 companies in our global sample, mainly in developed markets such as the US, Japan and the UK. The median average board tenure is 6.2 years, with the bottom 20th percentile being 3.9 years and the 80th percentile being 9.9 years. As such, anything below 3.9 years or above 9.9 years triggers a red flag.