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The Changing Face of the C-Suite: Older, More Diverse and More Experienced

business people sitting around a boardroom table

The biggest story inside the corporate world has always been who is going to get the top jobs. Human resources used to control that with succession plans, something that is less true now that hiring is decentralized. But getting the top job is still the biggest story around.

What can we say about who is getting these jobs and where are those people coming from? Knowing that may help us influence the decisions, even if we do not control them.

My co-researchers—Monika Hamori and Rocio Bonet—and I have been looking into who’s landed the biggest 1,000 jobs—the top 10 roles at Fortune 100 companies—since 1980. Here’s what’s changed and is changing.  

The youth movement has ended. The most surprising finding is that despite the popular notion that leaders are getting younger (it always seems that way as we grow older), that is not true for top executives. They did get younger from 1980 to 2001 by about six years on average, but since then, it has reversed. The average age of C-suite leaders is now 57, about the same as in the 1950s. A difference, of course, is that in the 1950s, they had on average only about 10 more years to live. Now it’s more like 25.

Uneven progress for women. Two other demographic changes merit attention. It is not surprising that the ranks of female executives have been growing, given that they literally started at zero in 1980. There were no women in the top 10 jobs at Fortune 100 companies that year. That number is up to 27 percent now, albeit still well below the 47 percent of the workforce made up by women.

Some of the increase is because members of the Fortune 100 shifted away from male-dominated industries to the service sector, where more women work. But some companies in traditionally male industries have made dramatic changes. At defense and aerospace company Northrop Grumman, for example, 58 percent of the top jobs are held by women. The trend has not all been upward, though. While in 2011, half of the top executives at PepsiCo Inc. and Lockheed Martin were women and 40 percent at Coca-Cola, GE and IBM were, those numbers were cut in half by 2021.

One lesson from this is that the advancement of women has not been a linear process. In fact, there is only one company where the ranks of women have increased continuously from the 1980s: General Motors. At every other company, it has been two steps forward, one step back.

More foreign-born leaders. The second demographic group seeing big change has been foreign-born executives. They lagged the overall increase in the population through 2011. But since then, they grew more quickly and now account for 15 percent of the total top executives. The U.K. and India are the two biggest sources. Foreign-born executives sometimes start working in the foreign subsidiaries of U.S. companies, but like other executives, they are rarely promoted to the top in the companies where they begin their careers.

The influential Ivies. The more important changes in trends have to do with the experience and qualifications of the leaders. In terms of education, it is not too surprising that MBA degrees have become quite common: 36 percent of top executives have them now. What is more surprising, though, is the continued dominance of the Ivy League in that group. The six Ivy universities with business schools—Columbia, Cornell, Dartmouth, Harvard, Wharton (University of Pennsylvania) and Yale—account for only 3.6 percent of MBA degrees overall, but 23 percent of all top executives are alumni from these schools.

Fewer “lifers” in the C-suite. Are we still promoting from within to these top jobs? It depends how we count from “within.” If we look at the percentage of these executives who were lifetime employees, it has been dropping steadily since 1980, when it was 44 percent. The biggest drop was in the last 10 years, when it fell from 31 percent of the top executives to 19 percent now. On the other hand, if we look at those who were brought into the companies as top executives, that has held steady at 26 percent since 2011.

The summary is that we are bringing in more talent from outside than ever but then moving people up to the top jobs once they have been seasoned within our companies. Evidence for this comes from the fact that the average tenure of top executives with their company is holding at about 12 years, but their years of experience elsewhere continue to increase: It’s now up to 15 years. Put differently, all the additional years of age and work experience executives have now compared to 2001 come from prior jobs elsewhere.

Average tenure rebounds to four years. Tenure in executives’ current jobs, however, represents a more complicated story. The year 2001 seems to have been a watershed moment for corporate leaders as tenure and other measures fell. Many things changed then. IT and the internet were seen—rightly—as the wave of the future. The pressure from investors became ingrained within institutions. New ways of operating, such as “re-engineering,” had become commonplace.

The tenure of those in top executive jobs dropped by half from 1980 to 2001, reaching a low of two years. Not surprisingly, the percentage of outsiders hired also doubled in that period as companies looked elsewhere for leaders who could move their companies in a different direction. The changes since then have been much more incremental. By 2011, though, tenure was almost back to the four-year level.

More execs coming from finance and law. Has the experience base of these top executives changed? Yes, and it followed a similar pattern over time. It may not be much of a surprise that finance takes the top spot: 35 percent of the top executives across all positions now have that background, which is striking because only one top job—CFO–requires it. The big change once again came in 2001, when the share of C-suite leaders with finance backgrounds jumped from 19 percent to 32 percent. It has increased marginally since then.

The other field with a noticeable jump was law, where the share of top executives having a legal background spiked from 11 percent to 17 percent from 1980 to 2001. The percentage has drifted slightly downward since.

The rising influence of the investor community surely explains at least some of the interest in having more financial expertise in the top leadership ranks. The explosion of government and regulatory interest in corporate governance, for which legal expertise is enormously helpful, began in the years leading up to 2001 with the savings and loan scandals. But the regulatory pressures came slightly after, with the passage of the Sarbanes-Oxley Act in 2002. Perhaps boards of directors and CEOs saw it coming.

Broader experience is valued. In terms of work experience, an assumption in succession planning had been that breadth of experience across functions was necessary to succeed in a top leadership position, and rotational assignments were designed to provide that. It may still be true that functional experience matters to success, but the amount that incumbents had has slid slowly down since 2001. Still, given that many top executives—CFO, CHRO CIO, chief marketing officer, and so forth—run functions where cross-functional experience would not seem to be as important, it is somewhat surprising that top executives on average still have experience in 2.78 different functions.

The big increase has come in cross-industry experience. Not long ago, it was common to hear that industry knowledge was so unique that it was crucial to a company’s success, and that an executive’s move to a different industry was difficult and risky as a result. That seems to have eroded: After holding steady through 2011, the average number of industries where top executives had experience before going to their current one jumped by 50 percent to 2.25. Given that the average years of experience elsewhere is now 15, that means that typical executives were changing industries every 6.6 years.

The bottom line: If we want to give advice and have influence on top executive appointments, what can we take away from this? An obvious point is that at least some of the criteria to get those jobs changes over time in response to what is going on in society and the business world. Things that might have ruled out candidates before, such as demographics and even coming from a different industry, may actually be more of a plus now. Job hopping does not seem to be the norm for top executives, but staying with the same company continues to decline in importance.

The most likely path to the top seems to be to move, perhaps across industries, and then to advance to the top jobs. Given the general decline in management development and succession planning, this probably makes sense: Scour the outside market for promising senior talent and hire them with the hope that they can advance. The last point, though, is that not all trends last. Some, such as the move toward younger executives, can actually reverse themselves.


Peter Cappelli is a professor of management at the Wharton School of the University of Pennsylvania and the director of Wharton’s Center for Human Resources.



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