The identikit CEO

May 09 2011 by Brian Amble Print This Article

In a world of increasing complexity and uncertainty, it would seem obvious that companies need leadership teams which encompass a more diverse range of outlooks and skill-sets than has often been the case in the recent past.

But in one critical aspect, it seems that boardrooms are become less Ė not more Ė diverse. Because according to new research from the UK, the CEOs of the country's largest public companies are now more likely than ever to have a background in accountancy.

The report, by recruitment company Robert Half UK, reveals that half of FTSE100 CEOs now have a financial background compared to three out of 10 just three years ago. And the trend is accelerating: of the ten FTSE 100 chief executives appointed in the last year, seven of them have a finance background.

What's more, the figures also highlight just how little progress has been made on gender and age diversity. The number of women running FTSE100 companies remains unchanged at just four, while the number of CEOs under the age of 45 has increased from four to six.

Phil Sheridan, Robert Half UK's Managing Director, said that the increasingly homogeneous nature of UK CEOs "reflects the increasing regulatory environment and need for accountability for the numbers behind the business."

He also predicted that the trend would accelerate as organisations sought to emerge to the recession and drive competitiveness.

But as Niamh O'Keeffe, Managing Director of leadership consultancy First100 points out, whether having a strong financial skill-set is the best qualification for a modern CEO is a moot point.

"While a strong grasp of numbers is undoubtedly important, the reality is that a great or even good CEO will need an awful lot more skills to achieve success in the top job," she said.

"CEO leadership is about setting a clear direction and bringing people with you in order to get the right financial results. FDs may wield power in the sense that they understand the business model inside out, but this does not mean that they can set out a clear vision for the whole company or know how to serve the needs of its customers in an ever shifting market-place."

In particular, she added, former finance directors tend to be risk-averse and ill-suited to fast decision making or capitalising on growth opportunities and innovation Ė as well as not always known for their charisma and inter-personal skills.

"There are many skill sets beyond a strong grasp of numbers that CEOs will need including the ability to forge a vision for their organisation, an understanding of their market challenges, the talent to build and motivate a great team and managing a business often with tens of thousands of employees."