Research from Heidrick & Struggles, the global provider of executive search and leadership advisory services, has found that prior experience in corporate leadership positions may not be as fundamental to landing the top CEO job as it once was.
The headhunter's Route to the Top 2022 report for Ireland is part of an annual global survey of 1,169 sitting public company CEOs around the world.
The H&S analysis found that across Irish public companies, one-third of CEO appointments in Ireland had no prior C-suite experience
The Irish results, garnered from the leaders of ISEQ-listed companies, find that ‘first-time CEO’ appointments in Ireland are 17% above the global average and 16% higher than the UK.
The report also finds that two-thirds of plc CEO appointments in Ireland were made internally, broadly in keeping with previous years’ results.
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Stafford Bagot, partner in Heidrick & Struggles' Dublin office, commented: “It appears that Ireland’s top companies are keeping a more open mind when it comes to the backgrounds and experience of potential CEO candidates. Our findings suggest that they are increasingly attracted to candidates with new perspectives that have been formed beyond the C-suite.
“Irish companies are showing a keen appreciation for succession planning and leadership preparedness within their own organisation, identifying candidates who offer deep institutional memory and a freshness of approach.
“We would urge companies to develop and implement robust early talent detection systems that can identify such high potential prospects and include them in the succession planning pipeline.”
Excluding founders, only 18% of the CEOs in the study are long tenured, which H&S defines as having spent more than 90% of their career in their current company.
The latest CEO appointment at an Irish plc is Myles O'Grady at Bank of Ireland, who is replacing external hire Francesca McDonagh.
O'Grady previously worked at the bank for a couple of years but most of his career has been spent working elsewhere.
For most CEOs, their current companies shaped them into senior leaders, but their early development happened elsewhere.
While 38% of those hired straight into the CEO role had been a CEO before, the head of division is a much more common route for internal appointments.
The Heidrick & Struggles research suggests that CEOs who were originally brought into the company two levels below the CEO have the longest tenure compared to all other CEOs, except founders.
In contrast, CEOs who had spent 90% or more of their career in their companies have the shortest tenures.
According to the report: “Our analysis suggests that boards that dive at least to the pool of executives two levels below the C-suite - and ensure that that pool includes people with the right mix of experience, capabilities, and perspectives - will develop a larger internal group of strong potential leaders.
“When boards bring CEOs straight into the role, their focus should be on using onboarding in the most effective way to allow the new CEO to learn very quickly how the organisation works, as well as to build networks and teams to complement his or her particular mix of expertise and capabilities.”
