An AMEinfo exclusive
Companies in the first half of 2021 appointed a record number of CEOs, making up for a significant slowdown in the second half of 2020, according to the 2021 Route to the Top report from Heidrick & Struggles, a premier provider of executive search, leadership assessment and development.
The global report shows that new CEOs are more likely to be women (11%), to be from countries other than where the company is headquartered (30%), and to have cross-border experience (46%).
The UAE part of the report shows that 42% of the new CEOs have advanced degrees, and 16% have cross-border experience, while 23% have less than one year of experience as CEOs.
“Trends in UAE are in line with global standards in most areas, however when it comes to non-national CEOs, the UAE stands out (with 28 percentage points over the global average),” Alain Deniau, head of CEO & Board of Directors Practice of Heidrick & Struggles in MENA region said upon the report’s release this November 22.
AMEinfo held an exclusive interview with Alain Deniau, and asked:
1- What makes a good CEO among new appointments?
Our recent research has found that it is primarily four capabilities in which future-ready leaders consistently excel: Leading through influence, driving execution, creating new thinking, and having an ownership mindset.
Companies will benefit by putting more value than ever before on such capabilities, both when they assess current CEOs and when they look for future ones.
CEOs today need to be agile and open to change or adaptation especially since we are still in the middle of an ongoing pandemic. Lastly, having a think-outside-the-box mentality is a must for CEOs, as they need to inspire their employees and take the lead on being innovative.
2- How have CEO expectations changed to reflect today’s technology-led services and products?
COVID 19 has certainly put pressure on the need to transform digital and technology-led solutions for businesses. We see more new CEOs with C-suite experience beyond the traditional CFO and COO roles, including roles in risk assessment, strategy, and technology. The diversity of the experiences brought here can prove to be beneficial at the executive level of the company, and therefore for the whole of it as well.
3- Are CEO leadership and decision-making processes in the UAE any different culturally from their western counterparts?
Amongst characteristics that UAE companies have is the fact that, as high as 42% of CEOs are non-nationals, compared to 24% globally. This also reflects how there are more external CEO hires in the UAE (44%) than globally (30%), a reflection of the country’s growth and diversification business model. Also, women make up 5% of CEOs in the UAE today, almost on par with 6% globally.
4- What are the top 3 steps CEOs should take upon their appointments?
Globally, the departing CEO’s average tenure was 7 years (UAE was 6 years), and during those years, the world has significantly changed. The long-term forecast is more difficult than it was before but still, once appointed, CEOs need to:
1- Sit down and get aligned with shareholders around mission & strategies
2- Meet the team and assess its strength and areas of development
3- Set up the objectives and communicate them to all internal and external stakeholders
5- What expansive views do companies have on succession planning?
Companies will open up to new perspectives and ideas, given that COVID 19 has raised expectations on the role of businesses in addressing concerns such as climate change, sustainability, cybersecurity, and other major external realities. Boards are rethinking the process of CEO succession to cope with these new constraints. In addition, we expect more attention to shift towards leadership skills and emotional intelligence rather than specific expertise and analytical skills.
Profile of CEOs in the UAE in 2021
- They were 49 years old at the time of appointment, and 42% were appointed before the age of 45
- Hold 5.9 years of average tenure
- Their average age now is 55
- Over one-third of CEOs with previous C-suite experience appointed in the UAE in H1 2021 (35%) came from a previous CEO role
- 30% of the CEOs appointed were formerly heads of divisions
- Only 2% had previous COO experience, compared to 14% globally
- Women make up 5% of CEOs in the UAE today, almost on par with6% globally
- Sweden has the highest percentage of CEOs with cross-sector experience (45%) while CEOs in the UAE have the lowest share (12%)
- 56% of CEOs in the UAE were internally appointed in 2021 (Compared to 65% of internal CEO hires globally)
Additional global CEO findings
- Nearly one-third of CEOs with previous C-suite experience appointed globally in H1 of 2021 (32%) came from a role other than CEO, CFO, COO
- 12% of the CEOs appointed were formerly risk, strategy, or technology chiefs, up from 3% during the first half of 2020.
- Only 18% had previous CFO experience, down from 24% during the same time in 2020
- The share of women appointed to CEO roles had dipped to 6% in the second half of 2020 and rose to 13% in H1, 2021
Globally, the profile of CEOs in 2021 show
- They were 49 years old at the time of appointment, and 25% were appointed before age 45
- The average tenure was 6.6 years
View the complete global report here.