Companies appointed a record number of CEOs in the first half of 2021, with more women securing top roles, according to a new report. However, the top leadership ranks still lack gender and racial diversity, confirmed the Global 2021 Route to the Top report from executive search firm Heidrick & Struggles.
The global report showed that compared to their predecessors, new CEOs are more likely to be women (11%), to be from countries other than where the company is headquartered (30%) and to have cross-border experience (46%). For the first time, the report also analysed the race and ethnicity of Fortune 100 CEOs in the United States and found that 4% are Asian, 4% are Hispanic/Latinx, 3% are Black and 1% are Middle Eastern or North African.
Additional findings from the global Route to the Top 2021 report reveal that progress toward gender equity surged forward after last year’s pause. Although the share of women appointed to CEO roles had dipped to 6% in the second half of 2020, and rose to 13% – more than double – in the first half of 2021. Despite the increase in women appointed to the corner office, women make up only 6% of CEOs globally today. Ireland has the greatest share of women CEOs (14%), followed by the US (12%) and Singapore (11%); Canada, Italy and Mexico tied for the lowest share (0%)
C-SUITE ROLES LEADING TO TOP JOB
Nearly one-third of CEOs with previous C-suite experience appointed globally in the first half of 2021 (32%) came from a role other than CEO, CFO, COO. In fact, 12% of the CEOs appointed were formerly risk, strategy or technology chiefs, up from 3% during the first half of 2020. Only 18% had previous CFO experience, down from 24% during the same time in 2020.
Additionally 62% of appointments were internal during the first half of 2021, up from 53% of appointments during the same period in 2020. When looking at appointments from the start of 2020 through the middle of 2021, women accounted for 11% of new CEOs hired internally, but made up only 7% of external hires.
POST-PANDEMIC CEO PROFILE
Globally, the profile of CEOs in 2021 show that:
- They were 49 years old at the time of appointment, and 25% were appointed before age 45
- Average tenure of 6.6 years
- Companies in Hong Kong have the greatest preference for non-national CEOs (76%) while China has the lowest (2%)
- Switzerland CEOs have the greatest share of cross-border experience (74%) while China has the lowest (10%)
- Sweden has the highest percentage of CEOs with cross-sector experience (45%) while CEOs in the United Arab Emirates have the lowest share (12%)
“The appointments in early 2021 provide a first-look at the CEOs that will lead in a post-pandemic era,” said Jeff Sanders, Vice Chairman and Co-managing Partner of the global CEO & Board of Directors Practice, Heidrick & Struggles. “The top job, like so many others, has been altered by the rapid changes that have taken place over the last 18 months. We are seeing companies start to look beyond the traditional ranks of CFO and COO when looking for their next CEO. In fact, we saw the proportion of new CEOs who held other C-suite roles more than double in the first half of this year compared to the same period last year, revealing that boards and organisations are taking a more expansive view in their CEO succession planning.”
DIVERSE EXPERIENCE WANTED
“As the global corporate environment continues to evolve to a greater stakeholder view, a change is also happening for the CEO,” said Bonnie Gwin, vice chairman and co-managing Partner of the global CEO & Board of Directors Practice, Heidrick & Struggles. “CEOs are quickly becoming the standard-bearer for a wide-range of issues from cybersecurity, sustainability, social justice and diversity, equity and inclusion, to inspiring employees and navigating rapid digital and societal transformation. These changes are requiring a new CEO profile that brings a wide and differing range of experiences in life and business to the role.”
The annual Route to the Top 2021 report provides an analysis of the profiles of the 1,095 CEOs at the largest publicly listed companies in 24 markets. They include Australia, New Zealand, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Mexico, Netherlands, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the United Arab Emirates, the United Kingdom, and the United States. Click here to access the full report.
Companies with women CEOs open doors for other female executives to access leadership and board roles, confirmed a new recent global study. Click here to read more.
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