- A study from The Conference Board found that S&P 500 CEOs in 2017 were, on average, older and stayed on the job longer than in previous years. Company heads' average age was 58.3 years, two years older than the average age in 2009. Their tenure in 2017 was the longest on record since 2002, at 11 years. The study suggested that these figures correlate with the economy's rebound after the Great Recession.
- Alluding to the "elusive" nature of gender diversity, the study noted that S&P 500 companies lost seven departing female CEOs, but gained eight in total. However, the study also recognized that the total number of female executives in 2017 — 27 — is the highest number of women leading S&P 500 companies "ever recorded" by The Conference Board in 17 years of reviews.
- The study concluded that succession planning will be more important, as companies in almost every industry will be challenged by the threat of disruption. Jeff Sanders, vice chairman and co-managing partner of the CEO & Board Practice of Heidrick & Struggles, said that more S&P 500 companies are turning to outside talent to fill CEO positions.
Succession planning is crucial in not only getting a qualified person to head an organization, but also to set high standards of performance and ethics for hiring a leader. Underperforming, unethical CEOs are more scrutinized today than ever partly due to increased focus on employer brand, especially at the recruiting level, and the internet's impact on employee communication. Wells Fargo, for example, recently found itself under fire once a New York Times report revealed that the company had been creating fake accounts under customers' names. The company recently announced major restructuring, including layoffs and branch closures.
While the number of female CEOs in general for S&P 500 companies continues to grow at a slow pace, the number of African-American women leading such companies is at deep lows — or even non-existent, as is the case with the Fortune 500. Organizations looking to bring company heads onboard who are more reflective of the workforce can create talent pipelines and establish leadership development programs to provide qualified candidates.
Development is a key aspect of preparing a workforce for upcoming disruption as well as ensuring employees stick around in a tight talent market. Succession planning might also include cross-training of current leaders internally to prepare for a departing CEO. Such a strategy, if applied broadly throughout an organization, can also improve retention and improve diversity across the board if workers are routinely given the chance to see how far their skills can take them with an organization.