April 24, 2018
Globalisation is leading to a growing trend amongst FTSE listed companies to hire senior leaders from abroad as organisations look for leaders with international experience. Although UK CEOs remain the first choice, with 60 percent of CEOs who were appointed through internal promotion last year being British, according to the Robert Half FTSE 100 CEO Tracker, UK companies are now increasing the number of global CEOs within the FTSE 100. In practise this means that the total number of UK CEOs leading the FTSE 100 has slipped to 61 of the total 100 companies from 65 a year ago. Nearly half (47 percent) of those CEOs who were hired externally for the top position were of other nationalities and of the 14 new CEO hires made this year, eight were of UK heritage, while six are leaders from the rest of the globe, edging the dial ever closer to a 50/50 split.
“Globalisation is blurring geographic lines for mega-companies in the UK and abroad, and businesses with a global outlook will be tomorrow’s dominant players,” says Charlie Grubb, UK Managing Director at Robert Half Executive Search.
“Even in times of economic uncertainty and change, the UK’s largest listed companies can only benefit from an inclusive, broad-minded and global approach to problem solving. It is positive to see that this approach is also being addressed through succession planning.”
As globalisation brings new challenges and attracts new personalities, it is interesting to note that while the ‘average’ FTSE CEO remains a British male in his mid-50s, the number of CEOs in their 40s has increased from eight last year to 14 this year. A number of other factors are also challenging the traditional CEO profile:
Whilst a financial background is still the preferred path to CEO, the number of CEOs with financial experience continues to decline. This year 40 percent of CEOs have a financial background, indicating a 15 percent drop since 2016 (55 percent)
Last year the Robert Half FTSE 100 CEO Tracker found that leaders with a background in tech were on the rise. This year the number of ‘tech-savvy CEOs’ remains steady at 11 percent. This indicates that FTSE firms feel confident in their technology capabilities even ahead of the introduction of disruptive events such as General Data Protection Regulation (GDPR) and digital transformation across industries
Findings also show that the UK’s top firms are no longer playing on the FTSE 100 ‘merry-go-round’ and are looking beyond their FTSE peers with CEOs being appointed from other FTSE firms dropping steadily over the last four years (from 24 percent in 2015 to 19 percent in 2018).
The education path to CEO also paints an interesting picture from university to additional qualifications. Eight out of ten FTSE CEOs (80 percent) hold a university degree or higher, with a split in degree choice as follows:
- 28 percent have BA degrees (21 percent in 2017)
- 21 percent have BSc degrees (27 percent in 2017)
- 24 percent of FTSE CEOs have gone on to complete an MBA (23 percent in 2017)
- 5 percent have a PhD (4 percent in 2017)
- While Oxbridge qualifications increased to 18 percent (16 percent in 2017)
“We’re seeing an evolving leadership landscape whereby traditional backgrounds may no longer be the set criteria for leading the top firms of the future. Global experience, education and values such as loyalty and tenure, however, will always be important, especially as millennials come to the forefront and take up leadership positions in their own right,” concludes Grubb.