Although the average FTSE 100 chief executive officer remains a male in his mid fifties, with a strong background in the world of finance, up-and-coming senior leaders have recently been getting to the top through a range of different career paths. A 2015 study, conducted by recruitment specialist Robert Half, suggests that the most common tenure of Britain’s top CEOs is five years and two months, with the current longest tenure record at over 32 years.
The overwhelming majority (71%) of today’s CEOs come from a senior position in the same industry, thereby offering a thorough understanding of their niche to their new company others (18%) usually serial CEOs, with a varied experience across many sectors, who can apply their leadership and business skills alone to their new role. A prime example of this behaviour can be seen in the pharmaceutical expert Flemming Ornskov, and the multi-sector CEO Adam Crozier. A final demographic (under 10%) are what we’d call lifers, who have joined their venture at a junior level and worked their way through the ranks of the company, holding a unique, specialist knowledge of that specific company and sector. One man who epitomizes this demographic is John Carter of Travis Perkins, who joined the company as a management trainee over 30 years ago.
These new figures suggest that there’s been a huge upheaval amongst senior FTSE 100 higher-ups, with just over a fifth of CEOs appointed to their station in the last 18 months. We’re also starting to see a significant trend towards the appointment of CEOs who have spent their whole careers in a single industry. This group accounts for 62% of new FTSE CEOs in the past 18 months. Prior to this, the figure had been closer to 51%. Despite the track record of executives such as Adam Crozier, who can successfully switch industries delivering shareholder value, it appears that CEOs with an impressive track record in one isolated sector are becoming increasingly popular.
The career backgrounds of most FTSE 100 CEOs today seem fairly similar to those analysed in earlier studies. Investigations in previous years showed that 52% had a financial background, compared to 21% in retail and hospitality, 17% in engineering, 14% in marketing and 11% in technology.
The female demographic, as with many senior positions remains small, but there is evidence of some slow progress. At present there are five women CEOs with the ascension of Liv Garfield and Véronique Laury-Deroubaix to Kingfisher. While this is a good development stood next to previous years, it is significantly out of proportion with the progress being made at a senior management level, where since 2011, women make up 11% more positions of FTSE 100 board members.
On the educational side of these studies, roughly 19% of FTSE CEOs have been educated Oxford and Cambridge (in line with previous surveys) and roughly a third have an MBA or PHD. There are other educational trends being observed, such as the fact that over a quarter of CEOs are trained chartered accountants. This draws even more attention to just how important a financial history can be, in the way that it displays a background of decent fiscal and leadership skills.
Phil Sheridan, UK Managing Director at Robert Half, said: “Finance has again proven itself to be the route to the top of Britain’s biggest businesses as the ability to provide strong financial leadership and commercial acumen continues to be a key asset of FTSE 100 CEOs. Professionals with an education or background in finance are highly sought after by organisations and demand continues to outweigh supply in today’s job market.”
“The climb to the top job can take different paths, but specific industry experience has proven to be a key consideration for businesses. Combining strong functional and technical knowledge with a deep understanding of the industry and competitive landscape is a sound strategy for motivated professionals looking to advance their careers.”