Global Route to the Top 2020 report on COVID-19

Across the UK, Covid-19 has sparked a renewed enthusiasm for leaders with prior CEO experience. The seventh annual Route to the Top 2020 report from Heidrick & Struggles (Nasdaq: HSII) which analysed CEO’s at 965 of the world’s leading companies, including all of the FTSE 100 CEOs in the UK, found that as companies seek to steady the ship amid the pandemic, prior experience as a CEO or CFO was prioritised.

As a result, 95% of FTSE 100 CEOs in the UK were male, an increase from 93% in 2019 and 91.8% in 2018. This worrying retrenchment on gender parity progress is a trend that was also reflected in the global report.

The Route To The Top report, which looks at the experience and demographics of CEOs across a wide range of industries, found that since the onset of the pandemic, businesses have made prior CEO or CFO experience a top priority.

In the UK, 83% of new appointments had C-Suite experience, with 41% of those having previously held a CEO role and 23% having been a CFO.

External appointments have increased as companies look further afield for the right leadership, but internal appointments still outnumber them by 2:1.

“In more stable times, companies appointing a new CEO might look for someone who can take them in a new direction and make bold choices. This is not the case right now.

The ongoing pandemic, as well as the impact of Brexit in the UK, are creating an environment where businesses seek experience and a proven track record above all.” said Claire Skinner, Leader of the Europe and Africa Region at Heidrick. “This understandable desire for stability does come at a cost.

Relying on the small talent pool of people who have already got CEO experience creates a barrier to diversity, as most experienced CEOs are older white males. This is reflected in our report where just 5% of CEOs appointed were female.”

Cross-industry and cross-border experience have also taken on less importance, providing a further indication that comprehensive, geographically relevant, and industry-focused experience is considered crucial by boards making the most senior hiring decisions right now. The average age of a CEO is 55, while the average age at appointment to CEO is 49.

Sharon Sands, Global head of leadership development for Heidrick & Struggles, and co-lead of the CEO & Board Practice in London said: “It’s crucial that Boards look beyond the current crisis, which may abate more quickly than expected due to vaccinations, to the long-term health of their organisations.

Topics like sustainability, inclusivity, and diversity are going to be on the agenda for a long time to come, so we would encourage our clients to look for a broad range of leadership experience that goes beyond the financials.”

Global Route to the Top 2020 report: Key trends from July 2019 to June 2020

Three-quarters of all CEOs (75%) had previous C-suite experience

? Forty-five percent have previous CEO experience, 18% have COO experience, and 17% have CFO experience.

? Of the markets analyzed, Singapore had the highest preference for previous CEO experience (97%), and China had the lowest (22%); the United States had the highest preference for previous COO experience (48%), and Belgium had the lowest (0%), and Australia had the highest preference for previous CFO experience (24%) and China had the lowest (4%)

Gender diversity, and diversity through cross-border and cross-sector experience declined due to the pandemic

? Women only made up 5% of CEOs globally in this year’s report; Ireland had the highest percentage of female CEOs, 15%, and Brazil had the lowest, with zero.

? Thirty-six percent of CEOs had cross-border experience, and 17% had cross-industry experience.

? Twenty-one percent of CEOs were non-nationals.

The average age at appointment to CEO is 50, and the average tenure of CEOs globally is 6.2 years

? Globally, only 22% of CEOs were under the age of 45 when appointed.
? The average current age of CEOs is 56; the United States had the highest average age of 60, and Sweden and Ireland had the lowest average age of 53.

About the Route to the Top 2020 report

The Route to the Top 2020 report provides insight into a composite view of the global CEO and looks at some critical differences among the 965 CEOs of the companies listed on the following 20 economy indexes: Australia, ASX 100; Belgium, BEL 20; Brazil, BOVESPA; China, SSE (top 100); Denmark, OMX Copenhagen 20; Finland, OMX Helsinki 25; France, SBF 120; Germany, DAX, and MDAX; Hong Kong, Hang Seng; Ireland, ISEQ 20; Italy, FTSE MIB; Netherlands, AEX; Norway, OBX; Portugal, PSI-20; Singapore, STI 30; Spain, IBEX 35; Sweden, OMX Stockholm 30; Switzerland, SMI Expanded; United Kingdom, FTSE 100; United States, Fortune 100. The analysis has been conducted with data valid as of June 30, 2020.

About Heidrick & Struggles

Heidrick & Struggles (Nasdaq: HSII) serves the senior-level talent and leadership needs of the world’s top organizations as a trusted advisor across executive search, leadership assessment and development, organization and team effectiveness, and culture shaping services.

Heidrick & Struggles pioneered the profession of executive search more than 60 years ago. Today, the firm provides integrated leadership solutions to help our clients change the world, one leadership team at a time. www.heidrick.com

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