The world is coming to terms with the first Papal resignation in almost 600 years. It is perhaps a sign of the times that immediate public reaction was one of indignation about the news having been kept under wraps and not all over Twitter before it was officially announced.
A different choice of words might have helped. The word “resignation” has become synonymous with the merry-go-round that is high profile football management and cabinet departures linked to gaffs and scandals. Perhaps the Holy See should have used a word weighted with more gravitas to distinguish Benedict XVI.’s decision. Retirement or abdication could have sufficed – but neither are really up to the job of depicting him standing down as the head of the Roman Catholic church. As a world leader, the same rules do not and ought not to apply when it comes to resigning.
That said, we are all flesh and blood and the same factors appear to explain Pope Benedict XVI’s decision as lie behind unforced resignations in both business and public life. Simply put, he appeared to know it was the right time to go.
In corporate Britain it is unusual for anyone past their sell-by-date to remain in office. The average time in office for the current CEOs of the world’s largest 100 companies is said to be four years and three months – compared to the five years and five months of their UK counterparts. The average age of a FTSE CEO is currently 52 whilst global CEOs are older, the average age being 56 years.
Age is also a big factor included in the appointment of non-executive directors. The earliest most people get there is around 50; the bigger the company the older you need to be. Under 50, it may be that people simply lack the gravitas for such a position within a major listed business.
It’s comparatively unusual for businesses to openly talk about the age of senior management. An organisation like Westfield Group, operating one of the world’s largest shopping centre portfolios, is untypical when it says on its website that the Group’s senior executive team has an average age of 49 years.
Some sectors are more cut throat than others but UK Plc has long since wised up to the fact it’s potentially discriminatory to dismiss or force the resignation of someone on grounds of age. It is even rarer that you find someone who is able to dictate the terms of their resignation/retirement.
Age takes its toll on everyone in business but experience is still valued in many industries. The march of the years isn’t the first reason someone’s resignation was cited as a means for moving on. Euphemisms such as ‘spending more time with the family” or ?taking time out to explore other opportunities” are often a transparent mask.
In the majority of cases, senior resignations are planned in advance by the business and, if the individual is fortunate, he or she will have had some part in those discussions. It tends to mean that either the individual believes his/her performance is a problem, or the business does.
This, of course, could be linked to age, but not always. In the board room, age rarely matters as long as performance, authority and respect of peers are still valued. A more powerful reason for enforced resignation is usually finance. Economics backed by perceived dated image is sufficient justification for a gentle nudge out the door. The new broom sweeps clean.
The cost of keeping on someone senior is not just about salary but, more often than not, everything to do with retirement benefits. The timing of a senior exit can sometimes be crucial to cash flow. Such announcements are often in tandem with the end of a financial year or a major reorganisation.
While the Vatican is more modern than it ever has been, the same rules simply don’t apply to the Pope.
Stephen Robinson is a partner at Laytons Solicitors and an expert in employment law.