Shining a light on the route to the top of business

24 Jan 2019

24 Jan 2019

Heidrick & Struggles' study of CEO backgrounds reveals the profile of business leaders in 2018, and unveils some interesting differences between nations.

This article is provided to Changeboard by our Future Talent 2019 partners, Heidrick & Struggles. You can see Heidrick & Struggles Partner Scott Snyder in conversation with Avon CEO Jan Zijderveld at
Changeboard's Future Talent Conference on 21 March.

Some 95% of CEOs are male, two-thirds hold advanced degrees and almost half have experience in finance or general management. These are the findings of the fifth series of demographic studies of chief executives conducted by Heidrick & Struggles.

Looking at 674 CEOs in 13 countries (12 in Western Europe, plus the US), the research reveals that internal promotion remains the most common route to the top; CEOs average 50 years of age at the time of their appointment, and nearly half of CEOs have previous experience in the C-suite. The vast majority of CEOs are nationals and almost half have cross-border experience.

However, the research also highlights interesting differentiation across countries, concluding that that while the destination may be the same, the path to the corner office can vary in significant ways.

Here, we outline some general findings and regional trends of interest to CEOs and HR directors.

A lack of women at the top

Despite organisations' efforts to improve workplace diversity, a mere one in 20 (4.9%) CEOs are female, according to Heidrick & Struggles’ findings, suggesting that more must be done to support women to rise to the top of business.

As Anne Lim O'Brien, vice chairman for the global CEO and board practice at Heidricks & Struggles, says: "It's clear there is much work to be done on a global scale. As boards plan for succession, it will be critical for companies to focus on the development of women and diverse leaders to help them gain the experience necessary to serve at the highest levels and become CEO-ready." 

Heidricks recently made a pledge to present clients with diverse board candidates globally, with a specific goal of delivering a minimum of 50% diverse candidates in total on an annual basis.

The study shows that the UK is leading the way in appointing women CEOs: 8.2% of UK CEOs are female – up from 6% in 2016 – followed by 8% in both Finland and Norway and 6.9% in the US. At the other end of the scale, none of the CEOs profiled from Denmark or Italy was female. Only 2.1% of CEOs in Switzerland and 2.8% in Spain are women.

Degrees of success

CEOs are highly qualified, with 7 in 10 (72%) holding advanced degrees; however, less than 3 in 10 (28%) hold MBAs. Portugal has the greatest percentage of CEOs who have earned an MBA (47%), a whole 10 percentage points higher than Spain, at 37%, which has the second-highest proportion of CEOs with MBAs. Italy, at 13%, has the smallest percentage of leaders at the top with MBAs. The figure for the UK is 30%.

It is notable that, in the US, the birthplace of the MBA programme, 34% of CEOs hold the degree, a figure that is sharply down from 49% seven years ago.

At 56%, the US had the smallest proportion of CEOs with advanced degrees in general, followed by Spain (61%) and Germany and the UK (both at 64%). The highest proportion of CEOs with advanced degrees is found in Finland (92%), followed by France and Sweden (both at 83%).

A background in finance

Though HR directors are fast becoming an integral part of C-suite, some 27% of CEOs have a background in finance while 22% have management experience.

Portugal and the UK, both at 35%, have the largest proportion of CEOs with finance experience, followed by Italy and Sweden, both at 33%. Finance is outstripped by other experience among CEOs in only two countries: in France, 23% of CEOs have general management experience versus 16% with finance background, while in the Netherlands, 28% have sales and marketing backgrounds and 24% have general management experience versus 20% with finance experience.

Meanwhile, some 47% of CEOs among the 13 countries studied have previous experience as a member of a C-level executive team. In the US, the figure is 63%, followed by Germany, at 54%. Norway, at 28%, had the smallest proportion of CEOs with C-suite experience, followed by Sweden, at 30%. The figure for the UK is the same as the overall average, at 47%.

Cross-border experience

In today’s global world, experience of working across countries and cultures is growing in importance. Accordingly, 48% of CEOs have worked in at least two countries; in the UK, the figure is slightly lower at 46%

In the Netherlands, 78% have worked across borders, followed by Switzerland (74%) and Sweden (67%). By far the smallest proportion was found in the US, where only 23% of CEOs have cross-border experience. In all countries except France, Italy, and Spain, the percentage of external appointees with cross-border experience matched or exceeded the proportion of internal appointees who have such experience.

Despite this cross-cultural experience, 77% of CEOs are nationals of the country in which they work. Switzerland is the only country with a majority of non-national CEOs, with 52% hailing from other countries, up from 48% in 2016.

In the UK, the share of non-national CEOs is 43%, up from 40% in 2016, while in the Netherlands, the proportion of non-national CEOs is 40%. In the other 10 countries, the vast majority of CEOs are nationals: 100% in Portugal, 90% in the US, 89% in Spain, and 88% in France.

See Heidrick & Struggles at the Changeboard Future Talent Conference 2019.