Following the World Health Organisation’s declaration of a pandemic back in March, companies around the world have delayed leadership transitions, appointing CEOs with proven track records and deprioritising diversity of experience and backgrounds, according to recent research.
Of the 31 CEOs appointed between 11 March and 30 June, 63% had held the role of CEO previously, compared to 44% in the cohort appointed from October 2019 to 10 March, 2020.
In addition, more companies looked outside of their organisations for their next CEO, with external appointments jumping to 57% from 35%, as they may not have had an experienced internal candidate to take over amid the pandemic.
“There has been a shift in CEO selection during the pandemic as companies seek executives who can help their organisations seamlessly navigate through these unprecedented times,” said Jeff Sanders, vice chairman and co-managing partner of the global CEO & board practice at Heidrick & Struggles.
In Hong Kong, companies also echoed the global sentiment of prioritising more experienced executives over other qualities.
More than three quarters of all Hong Kong CEOs (81%) had previous C-suite experience, with COO experience strongly preferred in Hong Kong (9%) as compared to Singapore (3%) and China (1%).
Hong Kong CEOs are also on average the oldest in APAC and the second oldest globally at 59. The oldest CEO in APAC is 87 and based in Hong Kong, while the youngest CEO in Hong Kong is 42. Hong Kong also has the highest average age of appointment in APAC at age 51.
Despite the fact that diversity has taken a backseat this year globally, Hong Kong CEOs remain international, with only about one third of them local. However, in terms of female leaders at the top, Hong Kong with only 2% female CEOs is behind APAC counterparts such as Australia (6%), Singapore (10%) and the global average (5%). Only 6% of Hong Kong CEOs have cross-industry experience, the lowest globally.
“Hong Kong’s tendency to value leaders with more C-suite experience has been especially beneficial in these times of uncertainty and disruption, as their proven abilities enable them to quickly manouevre unprecedented circumstances. As we enter 2021, it's worth noting that CEOs which bring to the table greater diversity in experience and thought, can provide insights and skills to steer companies towards success in the long term,” said David Hui, CEO & board practice leader at Heidrick & Struggles Hong Kong.
“Companies undertaking such an important appointment over the past year have been putting more importance on previous CEO experience and also looking externally for their next CEO. While a proven track record is extremely important during periods of uncertainty, we know that broader diversity of experience, sustainability and purpose will be viewed as critical to long-term survival and growth when the global business environment returns to some semblance of normal.”
The seventh annual Route to the Top 2020 report from Heidrick & Struggles analysed the backgrounds of the 965 CEOs from the largest listed companies in 20 markets to understand the skills and experiences that shaped their path to the top role. The report compared CEO appointments made after 11 March, 2020, when the WHO declared COVID-19 a global pandemic, to those appointed from January 2019 to March 10, 2020.