Blog from Rachael Saunders, Head of Communications,
Harvard Business Review (HBR) has released its list of 100 Best-Performing CEOs in the World, based on a scorecard that assesses long-term performance and value. This list is also broken down by geography and demographics, the latter includes gender, education (MBA or no MBA), career path (‘insider’ or ‘outsider’) and industry.
Only two (yes, just, two) of these 100 CEOs are female. This is not a reflection of lack of female ability, more a reflection of the paltry number of women in these top jobs globally. And of the two female CEOs list neither is from the UK. No 9, Margaret C. Whitman is CEO of US company eBay and No 98, Dong Mingzhu, is CEO of Chinese company Gree Electric Appliances.
The list is also indicative of a wider lack of diversity in the UK boards; of the 12 UK CEOs in the HBR list and none are from a Black, or Asian or ethnic minority (BAME) background. In fact, of the 46 CEOs who are from the US and UK (the only two countries with more than 10 CEOs in the list), only two are from a BAME background (no 41, John W. Thompson CEO of Symantec, and no 43, George Paz CEO of Express Scripts).
Apart from showing what is already widely known about the current lack of diversity on board levels, what is particularly interesting is that 83 of these CEOs are ‘insiders’ – i.e. they have risen through the company itself to the pole position.
It is very clear that being promoted through an organisation is the best way to get to the top. If we are serious about diversity at the top we need to look at all recruitment, promotion and progression processes, from entry level, senior manager fast tracks and right up to board feeder pools.
In terms of sector representation, 12 / 100 of the CEOs are in consumer goods industry, 9 are in the information technology industry and 7 are in retail.
We know that women’s purchasing power is immense and continues to grow – controlling $12 trillion of the overall $18.4 trillion in global consumer spending (Boston Consulting Group), with four in ten tech products bought by women (Forrester Research). Add to this the growing purchasing power of ethnic minorities (see The Multicultural Economy 2012, Jeffrey M. Humphreys for ethnic minority Buying Power in the US), and it is clear that there is an increasing business need for many companies to reflect the consumers they serve.
HBR has judged these 100 CEOs on their long-term performance and value. Identifying and nurturing the next CEO does not happen overnight. Nor does creating an inclusive workplace culture. Both require time and strategic planning, nurturing an ‘inside’ talent pipeline fit for the future, not just a mirror image of today’s board.
I hope that these CEOs are taking account of the diversity of their future and growing customer base and their employees as they plan for the future.
Harvard Business Review’s scorecard focuses on assessing performance data rather than popularity – for example, taking into account long-term performance of a CEO over their tenure by total shareholder return and market share, etc. Read more about how they created the scorecard.