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Women CEOsof the last 10 years
The 2013 ChiefExecutive Study
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Strategy&
For 14 years, Strategy& has examined CEOturnover and the incoming class ofCEOs at the worlds largest 2,500 public
companies. We focus on incoming andoutgoing CEOs rather than all CEOs because determining what happens atcritical decision points can help usunderstand what companies are looking forin their CEO and how the role is changing.
2
women have entered
or left oce
A total of
118
75%more women in
the incoming than
outgoing classes
Over the last10 years, there have been
13
By 2040, we project
that women will makeup about
of new CEO appointments
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This year, in addition to undertaking ourusual analyses, we took a special look at ourdata on women CEOs over the past 10 years.
A total of 118 women have entered orleft oce at these companies since 2004.
Some trends:
Women CEOs are still rare just 3 percentof this years incoming class but theyare becoming more prevalent, and weexpect that trend to accelerate. By 2040,we project that women will make upabout a third of new CEO appointments.
In terms of professional background,we found fewer dierences between femaleand male CEOs than we expected, buttwo particularly notable ones: Womenare more often hired from outside their
company, and women are more oftenforced out of oce.Read more
CEO turnover at the largest 2,500 companiesin 2013 was business as usual, with theturnover rate typical for non-recession years
and an emphasis on planned changes:
In 2013, 14.4 percent of CEOs left oce,
a small decrease from 2012s 15.0 percentbut higher than the ve-year averageof 13.9 percent.
Just over 70 percent of changes at thetop in 2013 were planned (not a resultof M&A or of CEOs being forced out),a common level in recent years but nearly20 percent higher than the average rateof such transitions during the rst decadeof the century.Read more
Most of the new CEOs are familiar to
the companies that hire them, a trendwe discussed at length in last years study.In 2013:
76 percent were insiders people promotedfrom within the company and 26percent had worked at only one companyduring their career.
58 percent joined their company from
one in the same industry. 80 percent hailed from the country in
which company headquarters were located. 65 percent did not have experience
working abroad.Read more
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4Strategy&
More women are becoming CEOs, slowly but surely
In eight out of the last 10 years, the proportionof women in the incoming class of CEOshas been larger than the proportion in the
outgoing class, indicating that womenCEOs are becoming more prevalent amongthe worlds largest 2,500 public companies.
Over the last decade, there have been75 percent more women CEOs in theincoming than outgoing classes.
Over the past ve years, the share of womenin the incoming CEO class (3.6 percent)was considerably higher than in the priorve-year period (2.1 percent).
Despite these trends, women made up
just 3.0 percent of the incoming class in2013, a 1.3 percentage point drop from 2012.
Dierence between the share of incoming women CEOs and outgoing women CEOs 2004 13
-1.0%
0.0%
1.0%
2.0%
3.0%
1.8%
1.2%
2.6%
-0.6% -0.4%
2.3%2.7%
0.1%
1.4%
0.5%
2004 2005 2006 2009 2010 2011 2012 20132007 2008
Percentage of women CEOs in incoming and outgoing classes 2004 13
1.6%
2.8%
+75.0%
Outgoing CEOs Incoming CEOs
As much as one third of the incoming class of CEOs will be women by2040, based on a 10 year trend in our data, ever higher education ofwomen, continuing entry of women into the business workforce, andchanging social norms of corporate leadership around the world.Ken Favaro, Senior Partner
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Where women lead
Women lead companies in every region.Companies in the U.S. and Canada have hadthe highest percentage of women CEOs
over the decade we studied (3.2 percent),and those in Japan have had the lowest(0.8 percent).
Companies in the information technology,consumer staples, and consumerdiscretionary industries have had the
highest percentages of women CEOs(3.1 percent, 2.6 percent, and 2.6 percent,respectively); the materials industryhas had the lowest (0.8 percent).
Percentage of incoming and outgoing women CEOs 2004 13By company headquarters region
U.S. and
CanadaWestern
Europe
Japan Other mature China Brazil, Russia,
India
Other emerging
3.2%
1.4%
0.8%
2.5% 2.5%
1.7% 1.6%
By industry
Information
Technology
Consumer
Staples
Consumer
Discretionary
Utilities Energy Financials Tele-
communications
Services
Industrials Materials
3.1%
2.6% 2.6%2.4%
2.3%2.1% 2.0%
1.75%
0.8%
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6
*The dierences or similarities cited on this page are statisticallysignicant within a p-value of 0.05. This means that there isonly a 5 percent probability that these ndings are due to chance.
Strategy&
Women CEOs are more often hired from outside
Female Male
Incoming and outgoing CEOs by insider versusoutsider status and gender 200413
Outsider
Insider
22%
78%
35%
65%
In terms of professional background*,women CEOs are dierent from theirmale peers in that they are more often
outsiders new CEOs hired fromoutside the company (35 percentof women versus 22 percent of men).
Otherwise women CEOs have about the
same professional backgrounds as theirmale peers in that they:
Rarely come from a region dierentfrom that in which company headquartersare located
Only sometimes have experienceworking internationally
Are of similar age
In addition, women, like men, are rarely
granted a joint CEO/chairman title.
That women CEOs are more often outsiders may be an indication thatcompanies have not been able to cultivate enough female executivesin-house. So when boards look for new CEOs, they necessarily nda larger pool of female candidates outside their own organizations.Gary L. Neilson, Senior Partner
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* The dierence is statistically signicant within a p-valueof 0.05. This means that there is only a 5 percent probabilitythat this nding is due to chance.
Strategy&
Among CEOs leaving oce over the past10 years, a higher share of women have beenforced out than men (38 percent of women
vs. 27 percent of men).*
How and when women leave oceTheyre more often forced out
7
Female Male
Outgoing CEO succession reason by gender 200413
11%
51%
38%
13%
60%
27%
M&A
Forced
Planned
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Strategy&
In 2013, CEO turnover at the worlds 2,500largest public companies decreased slightly,to 14.4 percent (from 15.0 percent in 2012).
The percentage of planned turnoversremained high in 2013, reaching just over70 percent, similar to the rate of plannedturnovers since 2010 but nearly 20 percenthigher than the rate between 2000 and 2009.
Among regions, the highest turnoverrates were in Brazil, Russia, and India(at 21.1 percent).
Among industries, the highest turnoverrate was in telecommunicationsservices (at 22.1 percent).
Both the regional and industry trendshave held for three years.
Changes at the top in 2013
The high proportion of planned turnovers is a strong signal that
companies are continuing to take an active, considered approachto putting in place new leadership.Gary L. Neilson, Senior Partner
CEO turnover events as percentage of top 2,500 public companies by succession reason
8%
6%
4%
2%
0%
10%
12%
14%
16%
2000 2001 2002 2003 2004 2007 2008 2009 2013
12.9%
10.9% 10.8%
9.8%
14.7%
15.4%
14.4% 14.4% 14.3%
11.6%
14.2%
15.0%14.4%
13.8%
6.4%
6.0%5.0%
5.3%7.7% 6.8% 7.2%
9.1%
10.1%
3.4%
2.4% 4.4% 3.2%
4.5%
4.2%
5.1%
3.4%
2.6%
3.2%
2.4% 1.4%
1.3%
2.5%
2005
9.2%
3.6%
2.6%
2006
6.6%
4.6%
3.2%2.2% 1.8%
2010
7.7%
2.2%
1.8%
2011
9.8%
2.2%
2.2%
2012
10.8%
2.8%
1.4%1.7%
2.8%
8
M&A
Forced
Planned
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Changes at the top in 2013 continued
9
CEO turnover rate in 2013By company headquarters region
M&A
Forced
Planned
Average
14.4%
U.S. and
Canada
13.2%
Japan
15.0%
Western
Europe
12.9%
Brazil, Russia,
India
21.1%
Other
emerging
13.4%
China
16.9%
Other mature
15.7%
9.1%
1.6%
2.4%
1.0%
1.4%
12.6%2.2%
6.7%
4.1%
5.4%
13.9%
2.2%
10.4%
0.7%0.7%
1.9%
14.5%
0.5%
2.8%
1.4%
11.4%
1.8%
By industry
M&A
Forced
Planned
Tele-
communications
Services
22.1%
Consumer
Staples
16.9%
Materials
16.6%
Financials
14.5%
Information
Technology
14.1%
Industrials
13.3%
Consumer
Discretionary
12.5%
Utilities
12.4%
12.6%
6.3%
3.2%
11.9%
1.7%
3.3%
11.6%
3.1%
1.9%
10.8%
2.7%
1.0%
9.0%
3.0%
2.0%
9.8%
2.2%
1.4%
8.5%
2.7%
1.2%
11.1%
5.9%
3.7%
1.8%
Energy
11.4%
Average
14.4%
0.7%0.7%
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Companies continue to select CEOs who are familiar faces, particularlywhen it comes to nationality and international experience, suggestingthat the global CEO is more mythical than real.Per-Ola Karlsson, Senior Partner
CEOs in 2013s incoming class were mostlyfamiliar to their companies (we found thisto be true over the past ve years, and rst
reported on it at length in last years study):
76 percent of 2013s new CEOs wereinsiders (compared to 71 percent in 2012),and a full 26 percent had worked at only onecompany (compared to 25 percent in 2012).
80 percent of incoming CEOs were fromthe same country as that in which companyheadquarters are located, slightly lowerthan 2012s 81 percent.
65 percent did not have experience
working abroad, a 10 percentage pointincrease from the previous year.
58 percent had joined their company fromone in the same industry, almost the sameas 2012s 55 percent.
The median age remained at 53.
2013s incoming class of CEOsFamiliar faces
10Strategy&
Incoming CEOs in 2013By insider versus outsider status By nationality compared to company
headquarters region
By previous experience in diferent regioncompared to company headquarters region
By same or diferent prior industry comparedto current company industry
76%
24%
Outsider
Insider
Has worked in other regions
Has not worked in other regions
65%
35%
58%
42%
80%
Joined from dierent industry
Joined from same industry
Dierent country, same region
Same country, same region
Dierent country, dierent region5%15%
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The share of the incoming class appointed with a joint CEO/chairman title has steadilydecreased since the beginning of our study and reached an all-time low of 9 percent in 2013.
2013s incoming class of CEOsTitles and education
The share of incoming CEOs with MBAs increased by nearly 50percent between 2003 and 2013 a trend we expect will continue.Ken Favaro, Senior Partner
11Strategy&
Percentage of incoming CEOs who also hold the position of chairman
45%
25%
20%
15%
10%
5%
0%
50%
30%
55%
35%
60%
40%
65%
7%7%
9%
15%
5%
53%
39%
33%
40%
2%
52%
30%
33%
0%
0%
2%
50%
61%
48%
18%
33%
48%
63%
2%
33%
33%
44%
32%
31%
18%
16%
37%
29%
25%
25%
16%
38%
26%
19%
20%
13%
26%
15%
19%
23% 24%
31%
18%
11%
10%
14%
17%
9%
5%
13%
20%
14%
0%
9%
12%
7%
6%
16%
12%
18%
17%18%
0%
14%
20%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
North America Europe Japan China & Rest of Asia Global Average
Incoming CEOs by MBA education 2003 and 2013
Has MBADoes not have MBA
2003 2013
72%
28%
81%
19%
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Strategy& 13
CEOs who generate the lowest returns toshareholders are more often forced out(32 percent for the lowest quartile
performers vs. 14 percent for the topquartile performers), and their companiesmore often hire outsiders to replacethem (31 percent vs. 23 percent).
When outgoing CEOs remained orbecame chairmen in a planned turnover what we call apprenticing incoming CEOs
89 percent of incoming CEOs wereinsiders in 2013 (up from 79 percentin 2012).
One CEO to the next
When a CEO is forced out, appointing a new CEO is a time-sensitivedecision. Companies that do not have eective succession practices in
place more often have to rely on outsiders to ll the position quickly.These companies may also be looking for new ideas.Per-Ola Karlsson, Senior Partner
Incoming CEO insider versus outsider status by forced versus planned departure of outgoing CEOsand quartile of annualized shareholder returns over outgoing CEOs tenure 2009 13
Outsider
Insider
69%
73%
68%
31%
27%
32%
Planned
68%
Total
100%
Forced
32%
Bottom quartile
81%
77%
82%
19%
23%
18%
Planned
81%
Total
100%
Forced
19%
Second quartile
80%
62%
82%
20%
38%
18%
Planned
89%
Total
100%
Forced
11%
Third quartile
77%79%
23%
35%
21%
Planned
86%
Total
100%
Forced
14%
Top quartile
65%
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About the authors
Ken FavaroKen Favaro is a Strategy& Senior Partner
and the global lead for its EnterpriseStrategy group. His expertise coverscorporate and business strategy, strategicinnovation, and organic growth. Ken
works across all industries, particularlyin the consumer, retail, healthcare, andnancial services industries.
Women are becoming more prevalent
at the top of the worlds largestcompanies a trend that will onlycontinue to grow. Companies needto plan how they will seek out andprepare their future women CEOsfor leadership.
Per-Ola KarlssonBased in Dubai, Per-Ola Karlssonis a senior partner with 25 years ofconsulting experience. His main areasof expertise are strategy formulation,organizational development,corporate center design, andgovernance. In addition, he frequentlysupports companies in the areasof change management and peoplecapabilities building.
Our research shows that on the whole,insider CEOs generate higher returnsover their tenures than outsider CEOs,so companies seeking to hire women
may benet from looking inside moreoften than they do today.
Gary L. NeilsonGary L. Neilson is a senior partnerbased in Strategy&s Chicago oce.He has 30 years of experience withthe rm and focuses on helpingFortune 500 companies with operatingmodel transformation challenges.More specically, he works with
clients on organizational design,cost restructuring, and enterprise-
wide transformation programs.He serves clients across all industries,including consumer, healthcare,nancial services, transportation,industrials, and energy.
The share of joint appointments asCEO and chairman is once again ata low level, a sign of good governance
reecting increased accountabilityand decreased conicts of interest.This is one of the longest-lasting trendsweve seen over the past
14 years.
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This study identied the worlds 2,500largest public companies, dened by theirmarket capitalization (from Bloomberg)
on January 1, 2013. Our research teammembers then identied the companiesamong the top 2,500 that had experienceda chief executive succession event andcross-checked data using a wide varietyof printed and electronic sources in manylanguages. For a listing of companiesthat had been acquired or merged in 2013,we also used Bloomberg.
Each company that appeared to have changedits CEO was investigated for conrmation thata change occurred in 2013, and additionaldetails title, tenure, gender, chairmanship,nationality, professional experience, andso on were sought for both the outgoingand incoming chief executives (as well asany interim chief executives).
Company-provided information was acceptablefor most data elements except the reason forthe succession. Outside press reports and other
independent sources were used to conrmthe reason for an executives departure. Finally,Strategy& consultants worldwide separatelyvalidated each succession event as part ofthe eort to learn the reason for specic CEOchanges in their region.
To distinguish between mature and emergingeconomies, Strategy& followed theUnited Nations Development Programme
2013 ranking.
Total shareholder return data for a CEOstenure was sourced from Bloomberg andincludes reinvestment of dividends (if any).Total shareholder return data was thenregionally market-adjusted (measured as thedierence between the companys returnand the return of the main regional indexover the same time period) and annualized.
www.strategyand.pwc.com/chiefexecutivestudy
Methodology
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Contacts
New York City
Anna Moreno+1-212-551-6110
So Paulo
Deborah [email protected]
Amsterdam
Monique De Meyere+31-20-504-1984
London
Deirdre [email protected]
Munich
Davina Zenz-Spitzweg+49-89-54525-559davina.zenz-spitzweg@strategyand.pwc.com
Paris
Beatrice [email protected]
Zurich
Karla Schulze [email protected]
Abu Dhabi
Joanne Alam+961-1-985-655
Shanghai
Michelle Wang+86-21-2327-9825
Tokyo
Tomoko [email protected].
Sydney
Kristine [email protected]
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