Last year, 19 CEOs at Russell 3000 companies circled back for round two at the helm, according to governance data from Insightia. By comparison, the data provider found only 13 returnees led firms between 2018 to 2021.

So far this year, four companies in the index have reinstated former CEOs. That’s, of course, not counting UBS, which recently rehired Sergio Ermotti, the bank’s chief from 2011 to 2020, to oversee an unexpected rescue of Credit Suisse. 

But is this trend a worrying sign? Probably not.

True, some studies suggest that boomerang leaders tend not to produce strong results for a company’s stock price, excluding a few high-profile examples. However, Insightia’s data challenges that thesis. It suggests that boomerangs don’t cause slumps; they start at a disadvantage, arriving when companies are already in a tough spot. In actuality, there’s no reason to believe returning CEOs are either the perfect solution or a mistake. (Insightia is owned by Diligent, which sponsors this newsletter.)

Here are some highlights from Insightia’s figures:

– Among Russell 3000 companies, 35 have reappointed the same person to the CEO role since 2018. Of those firms, 16 saw a positive total follower return (Insightia’s measure of stock performance with dividends) following the boomerang’s arrival, while 19 saw their stock decline.

– Of the 22 Russell 3000 companies currently employing a boomerang CEO, 12 are deemed highly vulnerable to an activist investment.

– Boomerang CEOs are absent for an average of two years and four months before being reappointed. During their second go-around, CEOs stay in the role for about 1.5 years, compared to an average seven-year tenure across the index.

Josh Black, editor-in-chief at Insightia, sees the risk that boomerang-led companies will attract activist attention as a sign that companies who look in the rear mirror to find their future chief are in a rocky transition period. But it’s also true that CEOs appointed for the second time don’t stick around for long. Adopting the boomerang solution might be an effective and quick “necessary evil,” rather than waiting for a new leader to find their footing.

If a boomerang CEO can patch up a company quickly, he says, “that might be acceptable to a board that’s looking over the long term and asking, ‘Can we afford a year and a half to right this ship?’”

Still, boards ought to be clear about why they’re bringing back a CEO and how long they expect the stint to last. They might share details about their succession strategy or indicate they’ve hired a recruiter, Black advises, so that investors know courting an ex-executive won’t become a habit.

Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan

A Word of Advice

 “I think in a time like this, where the news cycle has been dominated by inflation for 18 months, where employees feel their paychecks not going as far as they used to—organizational leadership would be wise to be sensitive to that.”

—Tony Guadagni, a senior principal at consulting firm Gartner, responds to the viral "pity city" comment made by MillerKnoll’s CEO

On the Agenda

👓 Fortune’s Paige McGlauflin also put the boomerang CEO trend under the microscope this week, looking at what it says about a board’s leadership planning, why ex-CEOs are often in demand, and what motivates them to accept invitations to return. 

🎧 Can psychedelic mushrooms make someone a better leader? Listen to an optimistic expert—International Institute for Management Development professor Alyson Meister, who joined The Anxious Achiever podcast—before running your experiment.

📖 New A.I. tools in the workplace mean companies face new cybersecurity risks. A.I. platforms can spread malware by convincing users to download infected software or, more menacingly, they can be trained to replicate a manager’s voice or writing style to fool employees. 

In Brief

- Disney has gone from prince to frog in a flash, writes Fortune’s Shawn Tully, who also identifies the three strategic mistakes that CEO Bob Iger has to undo in his second tour as CEO.

- Ben & Jerry’s is the latest—but not the last—progressive company to have its social impact bona fides challenged by a strong internal force: employees. Labor journalist Hamilton Nolan has the scoop in Fast Company.

- Entry-level workers should expect to wait up to three years for a promotion, but Gen Z workers expect one within their first 12 months.

- Pew Research created these eight data visualizations that, together, reveal the average American’s view on climate change and what they expect companies to do about it. Unfortunately, personal politics, rather than facts, play a bigger role in shaping opinions.

Editor’s Pick 

Luis von Ahn, the Guatemalan-born cofounder of Duolingo and creator of captchas, is one of the more fascinating figures in U.S. tech. His goal to democratize access to education inspired the creation of his bot-based language app. In a recent New Yorker profile, von Ahn describes the impact he imagines today’s rapidly advancing A.I. apps will have on the future of learning, particularly for the poor. Inside his company—long beset by users who complain that mastering Duolingo did not bring them any closer to real-life fluency in a foreign tongue—he's responding to modern A.I. with quick pivots. One day after he tried Chat GPT-4, he scrapped two new teaching programs that centered on humans.

Here’s a snippet looking at what came next:

“Six months later, Duolingo, in partnership with OpenAI, launched two new features. These features, both powered by GPT-4, are part of a new, pricier subscription tier called Duolingo Max. The first, RolePlay, prompts you to tap on one of the app’s animated characters, then drops you into an imaginary scenario. You’re a customer at a café in France, say, and the character is a barista. She asks if you want coffee or tea, and the conversation continues from there. ‘All of a sudden, we actually have an opportunity that we thought was five years out, which is replicating what the human experience is like when you’re learning language, and being able to scale it,’ [Edwin] Bodge, the product manager, told me.”

Read the rest here, and have a great weekend.