Report overview | Easy to classify — the education and experiences of Australian CEOs
A report into diversity among ASX 200 CEOs has concluded that Australian firms remain conservative in making executive appointments, tending to seek out CEOs that share similar education/experiences drawn from a narrow talent pool. This prompts report writer, Conrad Liveris, to question whether Australian companies are (necessarily) sourcing the best talent available.
Lack of gender diversity: The report found that there are more ASX200 CEOs called Andrew than there are women - the 'average' Australian CEO is a man, most likely named Andrew (7% of CEOs) or Michael (5.5%). By comparison, 5% of ASX 200 CEOs are women.
Lack of diversity of skills/experience? The report found that the CEO candidate pool has remained narrow with most CEOs sharing similar educational experiences and following similar pathways to become CEO and that this has changed little over time.
Are firms (necessarily) sourcing the best available talent? The report does seek to suggest that firms are necessarily making the wrong decisions with respect to CEO appointments. However, in light of the lack of diversity among ASX200 CEOs, it does question whether firms should consider revisiting their approach, to ensure they are recruiting the best available talent.
Consultant Conrad Liveris has released a report, based on the annual reports/websites of ASX200 companies, identifying commonalities and norms in the educational and professional experiences of CEOs. According to his analysis, the CEO candidate pool has remained narrow (despite the fact that business is increasingly global) and the pathway to become CEO has likewise remained narrow and has changed little over time. The report questions whether, in the context of increasing community expectations of Australian business, businesses should consider revisiting their approach to ensure they are recruiting the best available talent rather than sticking with the 'devil they know'.
The report was based on a review of publicly available discloses from ASX200 companies about the education and professional experiences of their CEOs. The material was gathered in January 2019 and reviewed in March 2019. Conclusions are based on the disclosures made in annual reports and websites by those companies. Additional evidence was sourced from the Australian Bureau of Statistics, specifically Census analysis, 4261, 6227 and 6202.
[Note: Among the policy reforms put forward by ACSI in response to the Financial Services Royal Commission is a call for all listed entities to be required to set a time frame within which they will achieve board gender balance (40:40:20). ACSI suggests that if this is not achieved by 2025, then regulatory intervention should occur. See: Governance News 08/05/2019]