Knowledge Center: Publication
Route to the Top 20191/9/2020 Heidrick & Struggles
In our latest Route to the Top, Heidrick & Struggles’ annual demographic study of chief executives, we combined data analysis and interviews to assemble a profile of what it takes to become a global CEO today, the skills and experience required, and how that picture is changing in the broader context of transformative economic and business shifts.
Our analysis provides not only insight into a composite view of the global CEO but also a look at some critical differences among the 906 CEOs of the companies listed on the following 16 country indexes: Australia, ASX 100; Belgium, BEL 20; China, SSE (top100); 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 has been conducted with data valid as of September 9, 2019.
Key findings on today’s CEO across all countries include the following:
- The average age of CEOs is 56.
- The average age at appointment to CEO is 50, with 21% appointed before they turned 45.
- Some 66% of CEOs were promoted from within.
- The average tenure length for CEOs is 6 years.
- Only 5% of CEOs are women, with the highest proportion of women CEOs in Norway (16%) and the lowest in China (1%).
- Some 76% of CEOs have prior C-suite experience, of which 39% had CEO experience, 21% had COO experience, and 18% CFO experience.
Alain Deniau, Singapore CEO & Board Practice Leader, also discusses the findings on BBC World News.
In addition to the overall findings, to capture whether there has indeed been significant change in the skills and experience companies are seeking in their CEO, we contrasted newly appointed CEOs with their veteran counterparts, people with 15-plus years in the position. Key findings include the following:
- There is far greater demand for C-suite experience across the board: 78% of new CEOs had C-suite experience, compared with 51% of veteran CEOs.
- Demand for CFO experience is on the rise: of the new CEOs, 22% had CFO experience, compared to just 5% of the veteran CEOs with this experience.
- This year’s new CEOs were older at their appointment: 52 years old for the new class versus 39 years old for the veterans still in the top role.
- Newly appointed CEOs were far more likely to have worked their way to the top internally, 73% of them compared to 47% of veterans.
- We have seen only a moderate improvement in gender diversity—with women comprising 9% of new CEOs versus 4% of veteran CEOs.
- By other important measures, diversity is making greater gains: more new CEOs are non-nationals (20%) compared to veterans (15%), and 44% of new CEOs now have cross-border experience, compared with only 30% of veterans who do.
David Hui, leader of Heidrick & Struggles’ CEO & Board Practice in Hong Kong, talks with George Hongchoy, CEO of Link Asset Management Limited and ranked 50th on Harvard Business Review’s world’s top 100 CEOs list, about the skills required in the evolving role of today’s CEO and about transforming business leadership in Asia.
The Evolving Role of the CEO
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Transforming Business Leadership in Asia
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David Hui: George, thank you for joining us today. You've been named as Harvard Business Review’s 50th ranked CEO in the world, so congratulations.
George Hongchoy: Thank you very much.
David Hui: When you look around the globe and at other fellow CEOs, how do you feel the role of a CEO has evolved in the past three to five years?
George Hongchoy: Increasingly, we can no longer just look inside, to satisfy ourselves, the board, or even just our shareholders. External stakeholders become more and more important, and we need to consider how to actually do good from all their perspectives.
The CEO has to be an important communicator, to tell his or her story. There are a lot of questions about the role of companies in society, so if we don't explain it well, other people will create a narrative for us, and that would then challenge our rightful place in society. One might say that we need to be a bit more politically sensitive, but I would say that it is really the narrative that we use and how we can be more forthright, be a step ahead in telling people what is our vision, what we are trying to do, rather than us stepping back and letting other people describe us.
David Hui: What other skills do you think are important, especially in an Asian context? We're very interested in how CEOs in Asia are developing.
George Hongchoy: What I have found is when we hire people from a typical Hong Kong company, the transition that they need to make takes a few months. They need to be able to have that thought as a leader, to be able to make decisions, not waiting for the chairman to give the nod. And that is a big step, because when you are in the role where you have to make decisions, you also have to accept the consequences of those decisions.
David Hui: What are the critical things that you’ve learned or that you’ve needed to use as skills to get to where you are?
George Hongchoy: Over the years, I’ve learned how to manage the different parties that I need to deal with, from the board to external investors, other stakeholders, to manage a team and motivate the team. And I think as you go up the ranks, sometimes you focus maybe on one or two aspects but really don't have the opportunity to face all the different angles, the different perspectives that you need to deal with as soon as you are thrown into the CEO role.
David Hui: We hear a lot of the terminology—for example, digital dexterity. We need people who understand digital and how it affects the business. How do you see that applying to companies in Asia and to Link?
George Hongchoy: The way that I have approached that is to always look at what is really the objective of having that system. Or how can we see it as user-centric? So not the IT guy coming in and saying that this is a great process we need to use.
David Hui: That it’s not just a new toy.
George Hongchoy: Yes, and there are so many, and they keep coming.
David Hui: When you look at the whole concept of change management, how do you relate that to the world and what companies in Asia need to do?
George Hongchoy: As the company changes, the group of people that lead the organization might need to change with it. Over the past ten years that I've been in the role, people reporting to me have actually changed quite a lot. There is a degree of loyalty that I need to have with my direct reports, but at the same time, when you look forward and say, “Is he or she fit for purpose for the next phase?,” sometimes you need to make that tough decision.
David Hui: When you look at the organization, where do you think the talent from within is coming from, and how do you identify the talent yourself?
George Hongchoy: In the early years, given that we were a new company, we hired from the outside. We constantly discuss how we can actually groom people, not necessarily from the bottom up, given that it takes time to get someone from the bottom all the way up to a CEO level, but even coming in in the middle and providing opportunities, providing chances, where we can ask them to take a bit of risk, cushion them when there are failures, learn from that so that the corporate memory includes lessons learned from successes and failures. Identify people who are able to be flexible to try new things. And then obviously we have our succession planning; we have all those things that good corporate governance demands. At the end of the day, it’s how to keep people excited about the vision, because that’s something that I repeat a lot. But with attrition, with a lot of noises going on, business volatility, sometimes you put that long-term vision aside and deal with the short-term problems.
David Hui: You focus on the things in front of you.
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