In a BusinessDay opinion column published Tuesday, Oct. 27, Dr. Dakuku Peterside urged boards to document why they retain underperforming executives and warned that shielding them can weaken staff trust.
The 2023 G20/OECD Principles of Corporate Governance say boards should monitor key executives, replace them when necessary and set clear lines of management accountability. The principles provide guidance, not a universal legal requirement.
A study published in The Journal of Finance examined 473 mostly private-sector, private-equity-backed companies from 1993 to 2008. Its authors reported that CEOs were more likely to be dismissed when results missed board expectations. They said boards did not dismiss CEOs when poor performance was attributed to factors beyond their control or honest mistakes. The paper also linked forced CEO turnover with improved company performance, though its sample limits how broadly the findings apply.
Gallup’s 2026 State of the Global Workplace report put employee engagement worldwide at 20% in 2025, down from 21% in 2024 and 23% in 2023. Manager engagement fell from 27% in 2024 to 22% in 2025. Those figures do not connect engagement changes to board decisions about executives.
A 2023 study in Korean Management Review found that, among 201 employees in 43 work groups across 27 organizations, stronger intentions to leave were associated with more workplace silence. It did not test whether protecting an underperforming executive causes employees to stay silent or leave.
Peterside argued that boards may hesitate to reverse appointment decisions because of personal ties or political pressure. He said colleagues, customers and institutions bear consequences when executives avoid accountability, writing: “The executive keeps the position. Everyone else carries the contradiction.” He recommended measurable expectations, independent reviews and documented reasons for retention. His column named no company, quantified no costs and set no date for a specific board review.
