Route To The Top Favours Male, 50-something, Oxbridge-educated Accountants
July 3 2006 - Heidrick & Struggles, the worldwide executive search firm, have published findings of the latest 'Route to the Top' study from Leadership Consulting Partner and author, Dr. Elisabeth Marx. Her study was based on the FTSE index of May 2005 and collated information on the background of CEOs through Who's Who, annual reports and media coverage.
The study shows that the typical FTSE 100 Chief Executive Officer is male, 52 years old and probably has a background in finance. Superficially, this is little different from the findings of the first survey 9 years ago but there have been some interesting changes in the detail.
- International experience. Whereas just 42% of CEOs surveyed in 1996 had completed an overseas assignment, 61% had in the 2002 survey and 79% in 2005. Most of this international experience came from assignments in North America and Europe rather than the newer economic growth centres in Asia and South America.
- Education. In 1996, almost two fifths (37%) of FTSE 100 CEOs did not have a university degree but this had dropped to 11% in 2002 and stood at 12% in 2005, comparable to the general European level for major company CEOs.
- Oxbridge background. Elitism appears to be growing rather than declining, with 22% of FTSE CEOs possessing degrees from the Universities of Oxford and Cambridge compared to 19% in 1996. Considering the high number of overseas CEOs, adding the US equivalent, Harvard, brings the percentage of elite-university CEOs to 28%.
- Functional background. While 24% of CEOs had a finance or accounting background in 1996, this had risen to 41% in 2002 and 38% in 2005.
- Nationality. 72% of FTSE CEOs are British with the largest number in the remaining 28% coming from the US, followed by Europe, Australia and South Africa
- Age. The average age of FTSE CEOs fell from 55 in 1996 to 52 in 2002 and stayed the same in 2005.
- Internal promotion. 69% of CEOs were internally promoted in 2005, compared with 77% in 2002 and 72%in 1996. Compared to those who were externally recruited, internally promoted CEOs:
- Are almost twice as likely to come from an accountancy/finance background (45% of 'internal CEOs' v. 23% of 'external CEOs').
- Are less internationally experienced (77% v. 83%).
- Are more likely to have external non-executive directorships (53% v. 23%).
Internally promoted CEOs are considerably less diverse than those who come from external searches where those with a background in sales and marketing (30%) were ahead of people with an accountancy/finance background.
"In terms of succession planning and the motivation of high potentials, this pattern suggests that UK companies need to ensure that executives with a non-finance background have equal chances to progress to the top position through targeted leadership development, said Dr. Marx.
"Our original hypothesis that moving abroad means moving ahead is fully supported by the high international experience of the top CEOs in this country."