A new type of CEO is emerging as companies seek different skillsets and backgrounds from CEOs appointed today versus a decade or more ago, according to the Route to the Top 2019 report from, executive search company, Heidrick & Struggles.
A global analysis of newly appointed CEOs in 2019 shows that 78% have previous C-suite experience, 73% are appointed to the role internally, they are 52 years old at the time of their appointment to CEO, and 64% hold advanced degrees.
In comparison, among their veteran counterparts, CEOs with 15-plus years in the role, 51% have previous C-suite experience, 47% were appointed internally, they were 39 years old at the time of their appointment to CEO, and 46% hold an advanced degree.
The sixth annual Route to the Top report has expanded from 13 to 16 countries to include Australia, Belgium and China. The report examined 906 current chief executives of the companies listed on the following country indexes: Australia, ASX 100; Belgium, BEL 20; China, SSE (top 100); Denmark, OMX Copenhagen 20; Finland, OMX Helsinki 25; France, SBF 120; Germany, DAX and MDAX; Italy, FTSE MIB; Netherlands, AEX; Norway, OBX; Portugal, PSI-20; Spain, IBEX 35; Sweden, OMX Stockholm 30; Switzerland, SMI Expanded; United Kingdom, FTSE 100; United States, Fortune 100. The analysis was conducted with data valid through September 9, 2019.
“The job of the CEO continues to expand, and the skills required for the role today are quite different than a decade ago,” said Jeff Sanders, Vice Chairman and Co-Managing Partner of the global CEO & Board Practice, Heidrick & Struggles.
“CEOs today continue to execute the managerial role of yesterday, maintaining day-to-day operations and obligations to shareholders. At the same time, they have to lead through constant digital and business disruption, serve as inspirational leaders, foster a diverse and inclusive workplace culture, maintain good relationships with multiple stakeholder groups and, increasingly, focus on long-term sustainability; in other words, today’s CEOs have to accomplish everything their predecessors did, and much more.”
Progress from a gender parity standpoint remains low with only 9% of women CEOs among the newly appointed CEOs in 2019. Unchanged from the report’s 2018 findings, women make up only 5% of the total number of CEOs globally despite achieving higher education levels than their male counterparts, with 71% of women CEOs holding advanced degrees compared to 58% of male CEOs.
“Over the past several years, we have seen minimal change in the number of women represented in CEO positions globally,” said Bonnie Gwin, Vice Chairman and Co-Managing Partner of the global CEO & Board Practice, Heidrick & Struggles. “As the CEO profile changes, and more is expected from the role to meet future demands, so too must the face of the CEO. The pool for diverse CEO candidates -women, people of color and individuals from underrepresented backgrounds – remains small, and more needs to be done to develop the pipeline of the future generation of CEOs.”
Additional findings from the global Route to the Top 2019 report include:
— More than three quarters of all CEOs (76%) had previous C-suite
experience.
— Thirty-nine percent have previous CEO experience, 21% have COO
experience, and 18% have CFO experience.
— Some countries have a strong preference for CEOs with previous CFO
experience, including Germany (29%), Norway (28%) and Sweden (28%).
— Previous COO experience is strongly preferred in the United States
(52%), France (29%) and the Netherlands (28%).
— Only 5% of all CEOs globally have an entrepreneurial background.
— Twenty-four percent of all CEOs included in the report had no previous
C-suite experience before being appointed to the CEO role.
— Among the 24% with no previous C-suite experience, 30% held global
head of division or business unit roles, 13% were vice presidents
or senior vice presidents, 12% had global functional roles, other
than finance or operations, and 10% were presidents or deputy CEOs.
— The average tenure of CEOs globally is six years, and the average age
at appointment is 50.
— Globally, 54% of CEOS have been in the role for less than 5 years,
and 33% for less than 2 years.
— Less than a quarter (19%) of CEOs have a tenure over 10 years, and
only 8% have 15 years or more.
— The lowest average age at appointment to the CEO role is 46 in
Norway. The highest average age of appointment is in the United
States at age 53.
— There is a 59-year difference between the youngest and oldest CEOs in
the report.
— The average age of the CEO is 56.
— The youngest CEO can be found in Germany at age 30, and the oldest
in the United States at age 89.
