That’s the findings of new research from recruiter Robert Half, revealing that CEO “churn” in the ASX 200 has reached a three year high of 22% turnover signalling an organisational demand for “fresh leadership” - and while these CEOs are still overwhelmingly male (94%), based in Sydney (45%) and post-graduate qualified (59%), the background and capabilities of these leaders are starting to shift.
In line with this movement of CEO’s in the market, the Robert Half survey findings show that more techies are taking up the CEO mantle compared to 2018 – with number growing to 11%, up from 8% in 2018.
The Robert Half survey also revealed that:
- There are 16 new companies and 43 new CEOs listed on the ASX 200 compared to 2018
- 39% of the ASX 200 CEO list were recruited from outside the business, a 4% increase from 2018
- The decline in internal promotions suggests that organisations may be lacking skilled tech leaders internally or have a talent pipeline that is not aligned with future business needs
- 11% of CEOs have a background in technology (3% increase from 2018), yet none were previously a CIO
The survey reveals that nearly half (48%) of the new CEOs have been selected from outside their company - ncluding all new female appointments – and external recruits now comprise 39% of all ASX 200-listed CEOs, a 4% increase since 2018.
However, diversity among CEOs remains stagnant, and in the year to July 20, four of the 43 newly appointed CEOs were female.
The survey also found that among the ASX 200, the number of CEOs with technology experience has grown 3% since 2018 and, today, more than one in ten CEOs (11%) have a background in technology. Robert Half says leaders need to navigate digital disruption across all industries, and this increase is reflective of the growing pressure companies are facing to source and hire the right technical expertise and leadership to facilitate digital transformation and remain competitive.
While the number of CEOs who have already served as a CEO before their current role remained stable at 26%, there has also been a 3% increase in the number of CEOs who served as a CFO prior to taking the top job.
Overall, 43% of the ASX 200 CEOs have a background in finance, which Robert Half says highlights the value of financial acumen to business leadership.
Robert Half says that as with previous CEO Tracker studies, higher education continues to facilitate faster ascension to the top job – with ASX 200 CEOs with a diploma or degree able to make CEO in their current company on average three years faster than those that did not have a diploma/degree in 2019, compared to 1.2 years faster in 2018.
Similarly, CEOs with a postgraduate degree were able to make CEO in their current company on average 3.5 years faster than those that did not have a postgraduate in 2019, a significant change from 2018 findings which showed it was 1.1 years faster.
Robert half says the importance of loyalty and a business acumen also remain central to the profile of Australia’s CEO.
On average, ASX 200 CEOs spent 8.5 years with their current company before moving into the top role – while international experience also remains high on the agenda for companies looking to fill CEO positions, with almost six out of ten (59%) ASX 200-listed CEOs having worked internationally – showing no change since 2018.
David Jones, Senior Managing Director of Robert Half said: “In our third year of this study we can clearly see that the composition of the ASX 200 CEOs is starting to change. Given the macro-economic challenges facing Australia, the efforts of certain sectors like FSI in rebuilding customer trust and the continued demand for rapid business transformation, our current climate is one in which externally appointed business leaders can really thrive”.
“However, companies need to ensure they are continuing to push for greater diversity and a variety of perspectives at all organisational levels,” Jones said.
“This is key to building innovative and motivated workforces that attract and retain top talent in a skills-short market. Moving forward, companies must balance hiring for ‘culture fit’ with ‘culture add’, in order to facilitate a diverse cohort that is capable of achieving lasting change.”
“Certain skills and experiences are fundamental to what it takes to become a CEO such as proven business acumen, strategic thinking and interpersonal skills. Aside from these skills, education, loyalty, cross border experience and financial literacy are consistent features when looking at the background of Australia’s top CEOs. It’s likely that demand for technology expertise will also continue to grow. Leaders who display these skills are not only well positioned to drive bottom line success but can demonstrate they are extremely adaptable and capable of leading diverse teams and innovative strategies during changing times,” Jones concluded.