The COVID-19 pandemic has altered nearly every aspect of the way companies view themselves, from their purpose to their workforce, as well as how they perform under pressure and in the face of uncertainty.
"There has been a shift in CEO selection during the pandemic as companies seek executives who can help their organizations seamlessly navigate through these unprecedented times," said Jeff Sanders, vice chairman and co-managing Partner of the global CEO & Board of Directors Practice, Heidrick & Struggles.
The seventh annual Route to the Top 2020 report from Heidrick & Struggles revealed that with the onset of the pandemic in 2020, companies delayed leadership transitions, appointing CEOs with proven track records and deprioritizing diversity of experience and backgrounds.
"While a proven track record is extremely important during periods of uncertainty, we know that broader diversity of experience, sustainability and purpose will be viewed as critical to long-term survival and growth when the global business environment returns to some semblance of normal," continued Sanders.
- Of the 31 CEOs appointed from March 11, 2020, to June 30, 2020, 63% had held the CEO role previously, compared to 44% in the cohort appointed from October 2019 to March 10, 2020.
- More companies looked outside their organizations for their next CEO, with external appointments jumping to 57% from just 35%, as they may not have had an experienced internal candidate to take over amid the pandemic.
- Women CEO appointments decreased from 12% in the cohort appointed after October 2019 to only 6% after the pandemic announcement.
- Cross-industry experience decreased from 18% to 13%, while cross-border experience decreased from 39% to 30%.
"As companies prepare to emerge from the pandemic, they need to take an in-depth look at their pipeline of future leaders to ensure they are developing a deep and wide bench of diverse executives, providing the experiences and opportunities required for the top job in a challenging future," said Bonnie Gwin, vice chairman and co-managing Partner of the global CEO & Board of Directors Practice, Heidrick & Struggles.
She added that the most critical skills sought after in CEOs include agility, inclusiveness, and the ability to continually learn and adapt. These are essential not only during times of crisis, but also as companies look to innovate and transform themselves.
Snapshot of CEOs (through June 2020)
- Three-quarters of all CEOs (75%) have previous C-suite experience
- 45% have previous CEO experience, 18% have COO experience, and 17% have CFO experience.
- Of the markets analysed, Singapore has the highest preference for previous CEO experience (97%), and China has the lowest (22%); the United States has the highest preference for previous COO experience (48%), and Belgium has the lowest (0%), and Australia has the highest preference for previous CFO experience (24%) and China has the lowest (4%).
- Gender diversity and diversity in cross-border and cross-industry experience has declined due to the pandemic
- Women only make up 5% of CEOs globally in this year's report; Ireland has the highest percentage of female CEOs (15%), and Brazil has the lowest (0%).
- 36% of CEOs have cross-border experience, and 17% have cross-industry experience.
- The average age at an 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 has the highest average age of 60, and Sweden and Ireland have the lowest average age of 53.