Chief Executive Study highlights CEOs with more diverse experience hired in the UK compared with other global regions. Though there remains a lot to be done to develop female chief executives.

Strategy& – formally Booz & Company and now part of the PwC network, has announced the results of this year’s Chief Executive Study, finding higher rates of industry-swapping and globetrotting CEOs in the UK compared with their global counterparts and lower female representation in chief executive roles in the UK compared with other regions. Now in its 14th year, the report annually investigates trends in CEO success and successions at the world’s largest 2,500 public companies. This year’s study additionally highlights insights observed from ten years of data compiled on women CEOs.

“In the UK we hire more CEOs who come from different industries and geographies and have a diverse bank of knowledge and experience compared with equivalent chief executives in other global regions. This year’s study also highlights how UK CEOs were twice as likely last year to be forced out of their role than CEOs in the US and Canada, underlining the important differences in corporate governance between the two regions.” said Richard Rawlinson, Partner at Strategy. 

Carolin Oelschlegel, Principal at Strategy&, notes: “This year’s study shows that there were 75 percent more women CEOs in the in-coming than outgoing classes in total over the past ten years. This is good news but in the UK we need to do more. Last year, we saw only one female chief executive out of the total 40 appointments made in 2013.”

This year’s report highlights the following findings: In 2013, the CEO turnover rate in the UK was 15 percent. While this is down from 2012 (16 percent), it is higher than Western Europe as a region (12.9 percent). 51 percent of incoming CEOs in the UK had worked in other regions, more than the global share at 35 percent. Additionally, only 59 percent of incoming CEOs in the UK have the same nationality as their company headquarters, less than the global share (80 percent). UK companies appointed CEOs with more diverse industry experience. 63 percent of incoming CEOs in the UK last year had joined their current company from a different industry, greater than the global share at 42 percent. Outgoing insider CEOs – people who had been promoted from within the company – in the UK delivered lower returns than outgoing insider CEOs globally. 

UK CEOs were twice as likely to be forced out of office compared with the US and Canada. Here the number of forced exits sits at 1.6 percent compared with the UK at 4 percent – and more still than CEOs in many emerging markets, despite being traditionally viewed as experiencing greater political or social upheaval. In 2013, the UK’s share of the top 2,500 public companies by market capitalisation increased to 4.6 percent, up 0.7 percentage points from last year. Women CEOs of the last ten years: The US and Canada have had the highest share of women CEOs in the past decade at 3.2 percent, while those in Japan have had the lowest (0.8 percent). Globally companies in the information technology, consumer staples, and consumer discretionary industries had the highest percentages of women CEOs (3.1 percent, 2.6 percent, and 2.6 percent respectively). The materials industry has had the lowest (0.8 percent). Women CEOs are more often hired from outside the company than male CEOs – in the last decade, insider female chief executive promotions stood at 65 percent compared with male promotions at 78 percent.

The UK saw just one female CEO out of the total 40 appointments made in 2013. Globally over the past five years, the share of women in the incoming CEO classes (3.6 percent) was 71 percent higher than in the prior five-year period (2.1 percent). Despite these trends, women made up just 3 percent of the global incoming class in 2013, a 1.3 percentage point drop from 2012. Strategy&’s recent report into the Third Billion ranked the UK as 13th out of 128 countries who invest to develop women in business with Australia, Norway, Sweden and Finland coming in the top three rankings.