The Modern (Global) CEO

Do today’s CEOs have enough experience in and understanding of emerging markets for tomorrow’s business opportunities?

For the first time in 2010, more than one-quarter of the top 2500 public companies now have their headquarters in emerging economies. Each year the consulting firm Booz & Co researches CEO succession at the largest publicly held companies in the world (as ranked by market capitalization), and emerging markets in their sample size have grown at a compound annual growth rate of 14% over the past 11 years – with BRIC representation having grown 24% annually.

Emerging Market CEO Turnover

In the same study, Booz estimates that while the global rate at which CEOs leave their job has dropped to 11.6%, the slowest turnover since 2003, BRI (Brazil, Russia & India) account for the second highest in turnover at approximately 17%, and other emerging markets as a group with the third highest in CEO turnover at approximately 15%. The only outlier in this analysis was China, who led with the lowest turnover, around 5.5%, which Booz cites as related to government influence over company leadership.

More Global Companies = More Global CEOs

Company boards have increasingly emphasized finding executives with experiences in managing workforces and business growth in emerging markets. CEO of executive search firm Korn/Ferry International, Gary Burnison, was cited in the WSJ as having said that today’s successful CEO candidates are ones who often "speak multiple languages or have managed segments of their company outside the United States."

Global CEO Supply vs Demand

Regardless of country headquarters, a key responsibility of the CEO role will increasingly be international and emerging market experience / understanding. Yet, those leadership capabilities are not growing in supply as fast as the labor markets and those global companies demand. "Emerging markets experience is extremely desirable and very hard to find," commented Burnison in the same WSJ article.

In Brazil this week, Korn/Ferry also coincidently announced an exclusive partnership with the British Council, the UK’s business and cultural relations organization, to leverage that groups relationships with UK-trained business leaders in the local market, one potential (and smart) way to access international talent for Brazil’s growing base of global companies.

Stategy + Business Magazine: “CEO Succession 2010: The Four Types of CEOs””
WSJ: “Slow Turnover Rate for CEOs”

This entry was posted on Wednesday, May 18th, 2011 at 8:36 am. It is filed under Brazil, China, India, Management, Russia and tagged with Booz, Emerging Market Talent, Global CEO, Korn Ferry. You can follow any responses to this entry through the RSS 2.0 feed.