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The board at shell knew it needed to do something, and fast. A shock revelation in January — that the world's third-largest oil company had overstated its proven petroleum reserves by 20% — was pummeling its stock price and angering its shareholders. Regulators on two continents were opening far-reaching inquiries. So in early March the board took action, ousting Philip Watts, who had been managing director of the Anglo-Dutch company for almost seven years and chairman since 2001, and replacing him with Jeroen van der Veer, president of Shell's Dutch sister company, Royal Dutch Petroleum.

A quick cure for all those headaches? Hardly. Just six days after Van der Veer took the helm, internal memos leaked to the press suggested that other top Shell executives still in office — including Van der Veer himself — may have known about the reserves problem as long as two years ago. Van der Veer vigorously denied the charges, but failed to calm the jangled nerves of Shell's institutional investors. And so the company was forced to ask itself an unpleasant question: How many times can you fire your CEO in a year?

Last week, after an inquiry by an outside law firm, the Shell board gave what it hopes is the definitive answer: just once. It said the probe had uncovered "disturbing deficiencies" in company practices, and announced the replacement of chief financial officer Judith Boynton. And for the third time this year, the company revised the size of its oil reserves downward. But Van der Veer was spared. "We have complete and unreserved confidence in [his] leadership," the board said. Shell stock recovered slightly in a sign that market traders believe the worst may be over, but the internal inquiry handed further ammunition to a swarm of U.S. lawyers who have filed class-action suits against the company. And Shell is still under pressure from some of its biggest shareholders, who want Van der Veer to do much more to address shortcomings in the firm's management. Peter Montagnon, the head of investment affairs at the Association of British Insurers, which includes some of Britain's biggest institutional investors, says Shell needs to put in place "a governance arrangement that provides for proper accountability and no longer tolerates chronic underperformance." Shell said the company is accelerating its review of management practices, but made it clear that it considers the reserves issue to be settled. In a statement, Van der Veer said the report "draws a line under the uncertainties that have surrounded" Shell's accounting for reserves.

That kind of boardroom drama is becoming more common in Europe. For good reasons or bad, to respond to a scandal or just to improve corporate governance, more and more companies are parting with their leaders. Indeed, being a chief executive officer these days is a bit like being on a reality-TV show: no one knows who will get voted out next. In the U.S., Michael Dell is out at Dell, and Michael Eisner is no longer Disney chairman. In Europe in the past month alone, London-based SSL International, maker of Durex condoms and Scholl foot products, replaced its CEO. German tech company Infineon unexpectedly lost its blunt-speaking CEO, Ulrich Schumacher. He said he was leaving for "personal reasons," but it's clear that the board and shareholders were dissatisfied with the company's performance. An interim chief, Max Dietrich Kley, now runs the company. A revolt by French shareholders led to the ousting of the Eurotunnel chief executive, Richard Shirrefs, and its board. Former travel executive Jacques Maillot leads the motley band of characters who are now trying to keep Eurotunnel out of bankruptcy.

Of course it's too soon to know if those changes will succeed. But a new generation of "clean-up" CEOs is already in charge. And a Time analysis of those high-profile executive shuffles shows what works, and what's merely a short-term fix. Over the past two years, chief executives of 17 of the euro zone's 50 biggest public companies have been replaced, with almost half of them leaving under pressure — and that doesn't include a cluster of big British, Swiss and Swedish firms where heads have also rolled. Companies affected include financial giants like Germany's Allianz and Credit Suisse of Switzerland, media titans such as France's Vivendi Universal and Germany's Bertelsmann, and a bevy of telecom behemoths like France Télécom, Deutsche Telekom and Britain's Cable & Wireless. Almost no sector has been spared, from manufacturing to retailing.

The purges signal that corporate boards and shareholders across Europe are fast catching up with the U.S. in refusing to tolerate scandal, sustained losses or other indications of poor management. In a study published last year of 2,500 publicly traded companies around the world, consultants Booz Allen Hamilton found a sharp increase in the turnover of CEOs — and it's Europe's chief executives who are now the biggest losers. Between 1995 and 2002, the frequency of CEO succession in Europe increased by 192%, compared with a rise of just 2% in North America, where company bosses have traditionally enjoyed less job security. The days when CEOs in Europe could count on cozy relationships with boards, governments and financial institutions to protect them are gone. In part, that' s a reaction to the irrational exuberance of the late 1990s, when CEOs like Jean-Marie Messier of Vivendi acted like rock stars — and paid themselves accordingly — and to the woes that have hit European firms such as Italy's Parmalat and the Dutch retailer Ahold. But it also reflects the influence of U.S.-style investor activism, and the growing clout of American pension funds in stock markets across the Continent. "The performance culture has come to Europe," says David Newkirk, a Booz Allen senior vice president.

For all such changes, some management experts and shareholder activists wonder whether the greater willingness to oust CEOs will improve the way companies perform. Rakesh Khurana, an assistant professor at Harvard Business School, finds it troubling that even after they fire a CEO, few boards engage in self-criticism. "It's not clear whether we'll be witnessing any dramatic reconsideration of what went wrong," says Khurana, the author of an acclaimed book criticizing the phenomenon of celebrity CEOs, Searching for a Corporate Savior. Colette Neuville concurs. She is a French shareholder activist who ran public campaigns against Messier at Vivendi and others. As long as the company directors who approved the mistakes of the old CEO continue to serve on the board, she says, similar problems will recur. She also predicts a return of the expansive — and often expensive — behavior that got so many of their predecessors into trouble. "In the weak economy of the past two to three years, they've cut debt and talked about cash flow," she says. "But when they get wind in their sails, it'll start up again."

Even the most influential institutional investors agree that it isn't enough simply to force out the CEO. Montagnon of the Association of British Insurers believes boards can and should do much more to evaluate their own performance. That's starting to happen in Britain on a systematic basis, he says, adding that the professionalism of boards is on the rise. "We're moving rapidly away from the idea that the job of a director is for retired generals, ambassadors, civil servants and other members of the great and good," Montagnon says.

What are today's companies looking for in a shiny new CEO? No two firms are alike, of course. But among companies across Europe that have swapped out their leaders in the past couple of years, some common themes emerge. Talk of "vision" and "synergies" has been replaced almost everywhere by a laser-like focus on profitability. Debt and heavy-handed micromanagement are out; sustainable earnings and delegating authority is in. Some corporate crises — such as Parmalat — may be too big for any mortal to solve completely, and point to the need for broader regulatory changes. But the new boys — women remain rare in the top jobs in corporate Europe — come under enormous pressure to untangle the failed legacy of their predecessors as fast as possible. Here's a look at five factors that help determine whether spring cleaning in the CEO's suite is enough to turn a company around.

The Need for Speed
One obvious yardstick of success or failure is stock price — and the companies whose stock is bouncing back the fastest are usually the ones whose new leaders have acted most quickly to tackle their core problems. In Britain, Cable & Wireless stock is up 50%, after almost doubling at one point since Italian turnaround expert Francesco Caio took over a year ago. He quickly shed loss-making operations his predecessor bought in the U.S. but was reluctant to sell when they didn't pan out. At ailing insurer Royal & Sun Alliance, Andy Haste, the 41-year-old CEO who took over last year, wasted little time in raising $1.8 billion in fresh capital and cutting 20,000 jobs. The jury remains out on some of the new CEOs, including Michael Diekmann at Allianz and Giuseppe Morchio at Fiat. Diekmann, 49, has bolstered the insurer's depleted capital base by almost €7 billion through stock, bond and asset sales, but hasn't yet turned around the lossmaking Dresdner Bank, Germany's third largest, which the insurer acquired three years ago in a move that quickly proved disastrous. Morchio, 56, is only promising to fix Fiat by the end of 2006.

No Rock Stars Wanted
The brash, swashbuckling style of fallen supermen like Messier — who referred to himself as a "master of the world" and published two autobiographies, one while he was CEO and a sequel after his ouster — has been consigned to history. "The extreme case of 'the company, c'est moi' is behind us," says Booz Allen's Newkirk. At the Zurich-based engineering giant ABB, Jürgen Dormann stunned senior managers by telling them in one of his first meetings after taking office in September 2002: "I don't like to work too hard or take decisions. You do that." It was a playful way of signaling that he intended to delegate operational management to his subordinates, and it marked a dramatic change for a company whose former leader, Percy Barnevik, imposed a rigid top-down culture on the firm. Barnevik moved on to become ABB chairman and gave up his roles of CEO and president in 1997, but his tenure was overshadowed by a pension scandal; an internal inquiry later found that he and his successor as CEO, Goran Lindahl, had awarded themselves pension benefits totalling $170 million. After a public outcry they paid half the money back.

Dormann's breath-of-fresh-air approach continued with a company-wide e-mail urging staff to stop making PowerPoint presentations for one another. "Consider this," he wrote. "Somewhere among the dazzling presentation techniques ... I sense a creeping loss of substance." That struck a chord. "Bravo!!! I am so tired of executives jamming phony presentations down my throat," one U.S. regional manager e-mailed back.

Debt is Bad ...
Nothing on corporate balance sheets so symbolizes the excesses of the 1990s as the towering debt left behind by fallen CEOs who couldn't control their acquisitive urges. Accordingly, the way their successors deal with that debt is key. Prize for the biggest reduction goes to Thierry Breton, 49, a sometime science-fiction novelist who moved from Thomson to take over France Télécom in September 2002. He is paring the France Télécom workforce by about 22,000 people, or 15%, mainly through attrition, and he has linked the pay of thousands of managers to tough performance targets. Debt tumbled from €68 billion to €44 billion in his first year, in part because Breton persuaded the French government and bondholders to put up fresh capital. Coming in a close second is Jean-René Fourtou, 64, a drug-industry veteran who took over France's teetering Vivendi two years ago and is turning it around (see next story).

... But Excess Is Worse
When CEOs in Europe and America impose fiscal austerity measures, they rarely include their own pay packages. But executive compensation has become a critical issue for investors, who are increasingly unhappy about overpaying for underperformance. The board of British drug firm GlaxoSmithKline cut the pay package of chief executive Jean-Pierre Garnier last December after shareholders voted it down at the annual meeting earlier in the year. (He still earned $5 million last year in salary and bonus, a 14% raise, but a golden parachute payment he would have received if fired has been cut.) At the Dutch retailer Ahold, which was battered by an accounting scandal last year, the new CEO, Anders Moberg, faced a storm of criticism when it emerged that he would receive a guaranteed €1.5 million bonus for each of his first two years, on top of a €1.5 million salary and stock options, as well as a hefty exit package. Moberg, a Swede who formerly ran IKEA, eventually agreed to take a lower salary and link his bonus to the firm's performance.

The Morale of the Story
Fear and loathing are often rife among employees when a new CEO comes in — especially when he's wielding an ax. Getting a firm working well again after a period of turmoil can require some internal gestures, both big and small. At Germany's Bertelsmann, one of the first moves by Gunter Thielen when he took over in August 2002 was to abolish the office of the chairman and the post of chief operating officer. Both had been created by predecessor Thomas Middelhoff in an attempt to consolidate power at the firm. "Thielen came in and said 'decentralize,'" says a senior Bertelsmann official. "More than anything, that restored calm." Thielen, a 24-year company veteran who also runs a small sausage factory in Saarland and a dental lab on the side, won a power struggle with the chairman of the company's supervisory board over plans to merge Bertelsmann's music division and Sony — and in January had his contract extended by two years to August 2007.

There's no guarantee, of course, that any or all of these steps will shelter a new CEO from investor wrath or ensure long-term success. Indeed, the management skills needed to restore a crisis-ridden company to profitability may not be the same as those required for years of sustainable corporate growth. "CEOs don't singlehandedly turn around a large organization," says Paul Coombes, a director of corporate governance at McKinsey. "The problem is that strategies change at a fast rate and need to keep adapting quickly, but organizational changes of a lasting sort require a great deal of patience." That may be. But at least the new boys know where they stand: if they mess up, they'll be out of a job fast — just like the ones they replaced.

• PETER GUMBEL
• Increasingly, a European company's first response to scandal or poor performance is to replace its CEO.