Globally and across industries, companies looking for successors to their chief executives are increasingly looking beyond the traditional CFO and COO titles as they evaluate prior C-suite experience.
According to a new report from executive search firm Heidrick & Struggles titled, “2021 Route to the Top,” nearly one-third of CEOs with previous C-suite experience appointed globally in the first half of 2021 (32 percent) came from a role other than CEO, chief financial officer or chief operating officer.
The proportion of new CEOs who had held other C-suite roles more than doubled from January 2021 to June 2021 compared to the same period in 2020, Heidrick & Struggles said.
The report notes that companies appointed a record number of CEOs in the first half of 2021, making up for a significant slowdown in the second half of 2020.
Twelve percent of the CEOs appointed were formerly risk, strategy or technology chiefs, up from 3 percent during the first half of 2020. CSOs came in a 5 percent, following by CTOs, 4 percent, and then CROs, 3 percent.
In addition, the number of former CFOs becoming CEOs took a notable dip, particularly compared to the previous six months. Only 18 percent of the new CEOs in the first-half of 2021 had previous CFO experience, down from 24 percent during the same time in 2020.
Heidrick & Struggles annual study of CEO placements provides an analysis of the profiles of the 1,095 CEOs at the largest publicly listed companies in 24 areas of the globe, including the U.S. and Canada, the UK and other European markets, Unite Arab Emirates, Australia and New Zealand, China, and Hong Kong as of July 5, 2021.
For the first time, the report also analyzed the race and ethnicity of Fortune 100 CEOs in the United States and found ethnic and racial diversity among CEOs in Fortune 100 companies is still low: 4 percent are Asian, 4 percent are Hispanic/Latinx, 3 percent are Black and 1 percent are Middle Eastern or North African.
The report also analyzes gender and age characteristics of CEOs, education levels, cross-sector and cross-border experience, as well as the incidence of internal vs. external appointments to the top spot.
Source: Heidrick & Struggles