While the average profile of a FTSE 100 chief executive officer (CEO) continues to be a 54 year old man with a background in finance, prospective senior leaders can succeed by following a number of different routes to the top, according to new research from leading recruitment specialists, Robert Half UK.
The 2015 annual Robert Half FTSE 100 CEO Tracker shows the average tenure of Britain’s top bosses is five years and two months, the longest tenure record currently held at more than 32 years.
The majority (71%) of today’s CEO’s move from a senior role in the same industry, bringing a deep understanding of their sector to their new company. Others (18%) are consecutive CEO’s from a variety of industry backgrounds who apply their leadership and business expertise to the role. Exemplars of this type of career path include pharmaceutical specialist Flemming Ornskov of Shire and multi-sector CEO Adam Crozier of ITV.
A further category (7%) are lifers who have worked their way up the ladder from a junior position and have in–depth knowledge of the business. This is epitomised by John Carter of Travis Perkins, who started out as a management trainee with the company 35 years ago.
There has been a significant turnover amongst senior FTSE 100 executives with a fifth (21%) of CEO’s appointed to their position in the last 18 months. There is also a trend forming towards the appointment of CEOs who have only worked in a single sector. In the last 18 months 62 percent of new FTSE 100 CEOs appointed have a history of only ever working in one industry, prior to this the figure was just 51 percent.
The general career background of today’s FTSE 100 CEOs remain similar to previous year’s analysis with 52 percent coming from financial backgrounds. This is compared with 21 percent in retail/hospitality, 17 percent in engineering/natural resources, 14 percent in marketing and 11 percent in technology.
Women also continue to make progress, albeit slow, into more of the top jobs in the UK’s best performing companies. There are now five female CEOs, and improvement of previous years but out of proportion with the improvements being seen at director and senior management level. Women now take 23.5 percent of FTSE 100 board members, which is up from 12.5 percent in 2011.
Of the 101 current CEOs, 61 percent are British born while to remainder have their origins in a range of other countries. In terms of education, 19 percent of FTSE 100 CEOs are Oxbridge educated, which is in line with previous years and a third (32%) have an MBA or PHD.
Phil Sheridan, UK Managing Director at Robert Half, says:
“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 when appointing their chief executive. 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.”
Alexander Pepper, Professor of Management Practice at The London School of Economics & Political Science, says:
“The annual FTSE 100 CEO Tracker is fascinating as it considers the CEO labour market from the perspective of what economists might call “human capital theory”. This is the relationship between work, performance and rewards on the one hand, and each individual’s age, gender, education, professional training and industry experience on the other. This makes the Tracker far more interesting than ever more commonplace surveys of executive pay”.