Breaking finance and business news, tax information, jobs and more for finance directors and senior finance professionals.

Management

CEOs younger and more international

Monday, 17 March 2008

Chief executives are a good indicator of how much more inclusive UK business has become.

In the 25th year of the FTSE 100, headhunters Odgers, Ray & Berndtson compared the backgrounds of chief executives of companies in the index with those on the original list in 1984.

Oxbridge-educated

The average age of a chief executive in 1984 was 60, but today it is 52. Eighty of the original FTSE 100 chief executives were British, while this figure is 58 today.

Thirty-three of the 1984 list were Oxbridge-educated, against 16 today. Thirty of the original list had no degree, against just five today.

Sixty-three of the original list belonged to at least one gentlemen’s club, against just 18 today.

Richard Boggis-Rolfe, chief executive of Odgers, says that the results are a good indicator of how much more inclusive the UK business scene seems to be, compared not only to 1984 but to other contemporary European business centres.

He believes that the growing proportion of foreign-born chief executives at the top of British business brings fresh colour to the recent non-dom debate.

He adds that his firm’s task as headhunters is increasingly an international activity.

“People in the UK considering senior positions in foreign business centres such as Dubai are attracted, among other things, by tax incentives. If we, too, are to attract the best, I see no reason why the same principle should not apply here,” he points out.

Accountancy qualifications

The FTSE 100 of 2008 is dominated by people with a much broader range of education and experience, and the number of nationalities represented on the modern list is also greater.

Fourteen members of the current listing are American; ten are from continental Europe or Ireland; and ten are from Commonwealth countries. Fourteen of them have chartered qualifications, notably in accountancy.

In Boggis-Rolfe’s view, the drop in the Oxbridge figure is not as good a measure as it seems.

“The numbers may have halved, but the number of foreign-educated chief executives has risen significantly, accounting for at least a proportion of this change. I’m not sure we can read too much into it,” he adds.

Gentlemen's clubs

Hobbies and social indicators also make interesting reading.

The number of chief executives participating in active pursuits such as running, walking, skiing, swimming and tennis has remained fairly level at around 20, and golf club membership is also constant.

The number of chief executives listing hunting, shooting and fishing among their pastimes has dropped from 20 to three.

Membership of gentlemen’s clubs seems really to have dropped off among chief executives.

Boodles, the Athenaeum and White’s had respectively 10, nine and seven mentions in the 1984 listing. In 2008 not one chief executive claims to be a member of any of them.

The club that seems best to have stood the test of time in this respect is the MCC, which had five members then, and has four now.

Just two women chief executives

Boggis-Rolfe says that it would be wrong to conclude from this research that past chief executives all reached their positions on rank, not merit.

He adds that it is interesting, however, to see the breadth, internationalism, dynamism and comparative youth of their modern successors.

In one respect, though, a change that many would welcome is slow in coming: in 1984 there were no women chief executives, and today, there are just two.”

The change in chief executives’ profile mirrors a change in the companies in the index. Many traditional industries have disappeared, with just 23 remaining of the original FTSE 100.

Odgers’ research also found telling differences in the profile of businesses forming the FTSE 100.

In 1984, 17 of the companies listed were in engineering, manufacturing, industry or utilities. In 2008, the figure is 12 but excluding utilities, the number would be just four.

Significant growth has been in natural resources, from seven to 14. In professional and support services it went up from one to seven and in media from three to seven.

Related articles