The route to CEO: How can it change for the better?
Rachel Huggins, Practice Lead & Head of Race Representation at Audeliss
Recent news has indicated some progress in women’s representation in business, with women now occupying two out of five board seats at FTSE 250 level. However, the issue remains that women are still not represented in the most senior positions, with data pointing to the fact that there is just one female to every 25 male CEOs at Britain’s largest publicly listed companies. Targets have been met when it comes to ensuring representation of women on the board, however we must not let these achievements paint a rose-tinted picture of the reality for many women in business today.
Recent Financial Times analysis revealed that nearly 80% of UK employers pay men more than women on average, with the gender pay gap sitting between 12% and 23%. Clearly there is still a significant issue when it comes to pay equity on the whole, and this is also in large part due to the lack of women in the most senior, highest-paid positions – which remain largely dominated by men.
To progress beyond the typical notions of what a CEO ‘looks like’ and welcome a broader range of candidates into these roles, more pathways to the top must be created. In our executive search processes at Audeliss, we see that one of the most common routes into CEO is from the Chief Financial Officer (CFO) position, followed by Chief Operating Officer (COO). These are positions that are disproportionately held by men, with women making up only 10% of CFOs and 2% of COOs in the FTSE 250 as of last year. If at least 90% of the default pool of candidates are men, then of course it comes as no surprise that women find it almost impossible to reach the top.
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Alongside working to increase the number of women in roles that have a traditional pathway to CEO, another path is broadening the pool of roles that are considered as such. A Chief Human Resource Officer (CHRO), for example, is a key role within any organisation. It requires high-level leadership skills and has grown in importance over the years, as companies have come to place more value on their most important asset, their people. CHROs oversee all aspects of people management including policies, practices, and operations, giving them a holistic overview of how an organisation is run and its values. CHROs have many touchpoints across organisations and should therefore be able to seamlessly shift into CEO positions, quite like those from financial C-suite positions do. What’s more, women and those from ethnic minority backgrounds are more likely to hold CHRO positions, with women alone making up around 71% of HR professionals in the UK – shifting the view of CHROs into a potential successor to CEO would go a long way to diversifying what a CEO can look like.
There isn’t one distinct way to be successful in business, and as such, the focus when appointing a CEO shouldn’t solely be on the roles the candidates have previously held. Rather, their skills, values and wider experiences are of more value, given these are the aspects that have a direct and lasting impact on their leadership style and therefore on the direction of the company. Some of the key attributes of a successful CEO include fast and definitive decision-making, proactivity and reliability. These are qualities that could be developed in any role, and in any industry.
The remit of the CEO has evolved significantly in the last five to ten years, and therefore the ‘type’ of CEOs within our organisation’s should too. CEOs today must understand and drive DEI efforts, setting the tone for entire organisations. While the CEO can delegate to CHROs or even specifically Chief Diversity Officers (CDOs), providing them with the strategy and infrastructure to succeed, the responsibility for the execution of DEI efforts remains with them. Without gathering the data and setting ambitious commitments for diversity across businesses, strides towards equality will either go unexecuted or unrecognised.
Anyone with the skills and attributes required to be CEO should be able to be fairly considered, regardless of their background and previous positions. While we are witnessing some shifts in the route to CEO, a welcome deviation from the usual focus on finance and operations, this must continue by broadening the pool of individuals that have the chance to progress into the role.
