CEOs more likely to come from outside the company, study finds
Thursday, September 13, 2012
More companies than ever before are bringing in top bosses from outside their ranks, according to a new study by Crist/Kolder Associates, a boutique executive search firm.
In a study of c-suite activity at 669 companies between January and July 2012, Crist/Kolder found 11 of 42 new CEOs came from outside their companies, rather than being promoted from within. If projected to out, 28 percent of all new American CEOs will have come from outside their companies in 2012, exceeding the 20 percent annual average since 1995, the starting point for Crist/Kolder’s data collection. The previous high came in 2008 when 27.4 percent of CEOs were outside recruits.
Companies hired from outside in part because many firms did not have a solid internal succession plan in place, Matt McGreal, a principal at Crist/Kolder told Forbes magazine. The trend also is a reflection of the strengthening economy, he said.
"We find a trend of companies more willing to make a change at the top when the economy is doing better,” McGreal told the magazine.
In terms of diversity, though the number of non-white CEOs has more than doubled since 2000 and the number of women CEOs has more than tripled in the same time period, in total both groups only account for 8.3 percent of CEOs measured by Crist/Kolder.
"We expect the rate at which women move into the CEO chairs at America’s largest companies to increase and the number of female CFOs to increase,” according to the report. Along with that trend, Crist/Kolder predicts more women board members.
Most CEOs do not hold a master of business administration degree, the study found. Just 40.1 percent of CEOs at the companies covered by the report have graduate business degrees. In the retail business, less than one quarter (23 percent) of CEOs hold an MBA.