The world of business is constantly changing – that’s not news to anyone. Too often we see the business sections of our newspapers filled with articles about the shifting makeup of corporations, or the increasing use of data to streamline crucial operations. We see a general theme stressing the undeniable impact that technology has had on our businesses, and the remarkable changes that are taking place. Comparatively, we see far less of those changes in the ways our businesses are actually run.
We all have our own idea of what makes up the average CEO. These notions tend to be based upon the types of people who were running our companies decades ago – boardrooms akin to those that go back almost a century ago, such as the famous board at the bank in Mary Poppins, through a couple of decades to American Psycho or Wall Street in the 80s – still dominated by men of a certain background and around middle age.
The CEOs we tend to read about the most – those in charge of some of our largest, multi-million pound organisations – are actively changing such perceptions. Think about Facebook’s Mark Zuckerberg or Yahoo’s Marissa Mayer, who are consistently in the press. Both are far more visible than the average CEO in a (comparatively) low-key FTSE 350 firm, and are better placed to alter the conversation around what a CEO really looks like in 2013.
But how accurate is this picture? Recent research we conducted into the backgrounds of FTSE 100 and 250 CEOs showed it’s remarkably surprising how conventional the majority of these business leaders are. Our business leaders in 2013 are incredibly similar to those of 50 years ago. We might tune in to watch something like Mad Men now and see its portrayal of business leaders as archaic, yet as a rule, it actually paints a reasonably truthful picture of the present.
96 per cent of the FTSE 100 and 250 CEOs are male. On average, they are 46 years old, and we found that Oxford or Cambridge were the most popular universities to attend en route to the chief executive spot. Additionally, these trends are not just restricted to the UK. Domo used data from the Harvard Business Review earlier this year to conduct research looking into the attributes of those heading up the 100 most successful companies across the globe. Again, the overwhelming majority (98 per cent) was male, had a university education and was middle-aged.
So, what does this tell us about the world of business? The way we carry out our work has changed, the ultimate organisational landscape has changed, but why exactly hasn’t business leadership changed? Is there a reason why this traditional form of a CEO has stubbornly remained the same for decades – centuries even? As I mentioned above, the most high profile CEOs in our society could lead us to believe that our top companies are actually being led by very different personas to what we expect from the conventional C-suite, but this is far from the case. Why hasn’t the view from the top generally progressed – and why hasn’t a move towards convention-defying CEOs been embraced across UK business as a whole?
Here we get ourselves into a “chicken and egg” scenario. Is the reason for the average CEO not changing due to a choice from certain individuals to not push for a top-level position, or is it perhaps that companies still expect only a certain type of employee to head up their organisation? Which is the cause and which is the effect?
One prominent issue here is the lack of female CEOs. On the whole, the world of business has been keen to ensure that the overall landscape is one of equality. It should be expected that in 2013, there should be just as many women leading their industries as there are men. However, our research found that only 4 per cent of FTSE 100 and 250 CEOs are women, while a study by BoardEx showed this figure to be even lower among our top private companies. Some people argue that a lack of women CEOs comes down to a choice from women themselves not to pursue the very top level positions, and many still think this comes down to putting family ahead of a career or simply women not being as competitive as their male counterparts.
On the other hand, a lot of people think that business “at the top” just hasn’t moved forward as much as we would like to think. It’s thought that women in business still have more social pressure on them than men in the boardroom. A recent poll by LinkedIn saw 46 per cent of women cite “institutional barriers” as the main reason for their not being able to break through to CEO roles. In this case, it could be argued that the “old boy” networks at the top prevent many women from receiving the support they need in business to be able to make it to the top, at least in the same way that men can. Even if there’s no conscious decision or motive behind it, existing business networks, and even traditions themselves, come from a “like for like” approach that results in a lack of diversity, and could also explain the prominence of highly educated Oxford and Cambridge graduates in our current list of FTSE 100 and 250 CEOs.
Whatever the reason is for the staid CEO, a lack of diversity among board groups is likely to hold businesses back from reaching their full potential. As a matter of fact, research from the UK’s Department for Business last year showed male-dominated boards will fall behind their rivals and will fail to progress at the same rate as they miss out on fresh, creative ideas from women, while hiring people from across different backgrounds and of varied educations can help bring new perspectives to a number of situations and debates.
Clearly change is needed where it just hasn’t happened. We’re being drawn into a false sense of the business world having taken on a completely different shape, where everyone has the same opportunities to reach their goals, but it’s overwhelmingly evident that there’s still some form of glass ceiling in place that’s hindering true diversity at the top and organisations could be suffering from stilted evolution, or even regression as a result. Ultimately, the business landscape on a whole may be evolving at a phenomenal pace, but boardrooms really need to hurry up and follow suit. Technology can take you so far. It’s then down to the individuals and the company culture to encourage change.