Routes to Britain's top FTSE jobs revealed
The 2015 annual Robert Half FTSE 100 CEO Tracker shows that the average tenure of Britain’s top bosses is five years and two months, with the longest tenure record currently held at more than 32 years.
The majority (71%) of today’s CEOs move from a senior role in the same industry, bringing a deep understanding of their sector to their new company. Others (18%) are serial CEOs from a variety of industry backgrounds who apply their leadership and business acumen to the role.
These career paths are exemplified by 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 role and have an enviable, in-depth knowledge of the business. This is epitomised by John Carter of Travis Perkins, who started life with the company as a management trainee 35 years ago.
The analysis reveals there has been significant turnover amongst senior FTSE 100 executives with a fifth (21%) of CEOs appointed to their position in the last 18 months. Significantly, we are seeing a trend towards the appointment of CEOs who have only ever worked within a single industry. In the last 18 months 62% of the new FTSE 100 CEOs appointed have a history of only ever working in one industry, prior to this selection panels chose CEOs with single industry experience just half (51%) of the time.
Despite the track record of leaders such as ITV’s Adam Crozier who has successfully switched industries delivering shareholder value, it appears selection panels are increasingly looking for CEOs with credentials and impressive track record working in a single sector.
The general career backgrounds of today’s FTSE 100 CEOs remain similar to those analysed in previous years’ studies with 52% having a financial background, compared to 21% in retail/hospitality, 17% in engineering/natural resources, 14% in marketing and 11% in technology.
Women continue to make slow progress towards taking more of the top jobs in the UK’s best performing companies. There are now five female CEOs with the appointment of Liv Garfield to Severn Trent and Véronique Laury-Deroubaix to Kingfisher, an improvement on previous years but out of proportion with the improvements being made at director and senior management level, where women now take 23.5% of FTSE 100 board members, up from 12.5% in 2012.
Of the 101 current CEOs (one of TUI Group’s co-CEOs, Peter Long, is reportedly due to step down in 2016), 61% are British born while the remainder have their origins in a range of other countries, including the USA, Chile, South Africa and Greece. One of the newest members of the FTSE 100 index, Hikma, is the first Jordanian company to be listed.
From an education point of view, a fifth (19%) of FTSE 100 CEOs are Oxbridge educated, in line with previous years and a third (32%) have an MBA or PHD. More than one in four (27%) CEOs are qualified Chartered Accountants (ACA), further underlining the importance of a finance background in providing strong fiscal responsibility in the leadership of Britain’s largest companies.
There were a total of seven new entrants to the FTSE 100 in the period analysed, including Dixons Carphone and Barratt Developments. Housebuilding group Taylor Wimpey also rode high on the construction boom to become a FTSE 100 business in late December 2014, while other companies to achieve success included Intu and Hikma. In April 2015, a further change was made to the index when the acquisition of Friends Life by Aviva was completed and Merlin Entertainments took up the spare place.
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 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, said, “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”.