More holistic approach to women candidates, recruiting CEOs to have more positions

Boards are on hold to hire new CEOs after the pandemic put the brakes on leadership change. A study by Headhunter Hedrick & Struggles International Inc. has found a sharp jump in hiring in the first half of this year after a slowdown in the second six months of 2020.

One notable change is the reversal of the decline in female hires. In the first six months of 2021, women accounted for 13% of the 103 appointments. The ratio was just 8% (of 89) in the first half of 2020 and 6% (of 49) in the second half. Hedrick and Struggles suggest that a possible explanation is that when the pandemic first hit, boards were prioritizing CEOs with current experience in the role, and such candidates are more likely to be male.

Today, boards are adopting a more holistic view of the job. Being the boss elsewhere in the previous term remains the most common marker on the CEO’s course life. But its relative importance seems to be diminishing.

For starters, the serial CEO is becoming less prevalent. Given the newly appointed boss’s previous two jobs, the role of a former CEO was less common in the first half of 2021 than in the same period a year ago. The new CEO was also less likely to be the first chief financial officer. This is the traditional move to the top job, as is the other general executive board role. Chief Risk Officer, Chief Strategy Officer or Chief Technology Officer are becoming common routes.

With better and more nuanced succession planning, companies are finding suitable candidates internally rather than hunting down owners from rivals. And these appointments are often women.

It is welcome that instead of automatically recruiting from the existing pool of CEOs and CFOs, boards are slowly taking a different approach and looking within. Divisional heads below the board can have just as useful skills as running large companies. And it’s possible to support that layer of talent by making the leap straight to CEO.

One way is to encourage potential leaders to take non-executive positions elsewhere, giving them a taste of the dynamics of the boardroom. The second is to provide them with more opportunities to introduce them to their boards and participate in directors’ deliberations, as well as to give them airtime on earnings calls with investors and analysts.

It will take some time for such initiatives to really bear fruit. The gender mix among CEOs may look more balanced in the years to come. But adopting this philosophy will require more companies to develop their next leader on their own.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.