One of the most important decisions your company can make is who to recruit to the role of chief executive officer (CEO). They will be responsible for top-level strategic decisions that direct the company’s overall growth and vision over years or even decades.
An effective CEO will need a considerable amount of intelligence, focus, determination and business aptitude. But given that these traits are common to many senior executives, it’s still important that you choose the right selection criteria and qualifications. These continue to evolve as Australian businesses operate in an increasingly competitive, changing, and globally connected environment.
Making the right selection decisions begins with having a clear view of the role, along with the capabilities and approach needed to produce results. Here’s a look at five key factors based on trend identified through the Robert Half CEO Tracker:
When the time comes to review resumes and prepare for job interviews with potential candidates, spend some time exploring a candidate’s educational qualifications.
A strong educational background is typically considered a fundamental stepping stone to reaching the top job in an Australian company. The Robert Half CEO Tracker revealed that 85% of ASX 200-listed CEOs* hold an undergraduate degree, and 59% have earned a postgraduate degree. An MBA is a less critical measure of success, however, with just 24% of CEOs having earned one.
2. Industry experience
Typically, a capable chief executive has a wide and varied background in business. Accordingly, the majority (43.5%) of ASX 200-listed CEOs have industry experience in finance, emphasising the value of a clear understanding of the ‘numbers’ underpinning an organisation.
Increasingly, Australian companies need leaders who understand how automation and digital transformation will continue to reshape business operations and processes. Currently, only 10.5% of Australian CEOs have specific industry experience in technology. This number is likely to grow as technology plays a greater role in driving innovation strategies and remaining ahead of the competition.
3. Job history
There are many potential career paths to becoming CEO. Generally speaking, your successful candidate should have extensive senior-level managerial experience in the company’s field.
The best CEOs tend to be both commercially astute and understand the link between human performance and business results. They are able to craft a clear and compelling vision for the future, while ensuring their executive team understand, and stay committed to realising the business objectives.
Look for past examples of the key qualities that make a great chief executive. Do they remain calm and focused under pressure? Can they grasp new concepts quickly? Finally, do they have the initiative and creative spark to seize on potential opportunities that will contribute to your company’s bottom line?
4. Global work experience
Australia is recognised as one of the world’s leading business hubs, and the CEO community reflects this fact – almost six out of ten (59%) of ASX 200-listed local CEOs have worked internationally.
Ideally, they will have extensive experience in building and leading international teams, and forging partnerships with foreign companies and/or governments. Hiring a CEO who brings a global outlook to the job will also help your company in its efforts to attract the best and brightest talent from all over the world.
5. Internal vs external
When sourcing a new chief executive, companies face a basic choice – hire from within or search outside? Internally sourced CEOs are often seen as the safer option due to their ability to leverage their knowledge of the company, its culture and its talent to build on past achievements.
If the company’s future growth will depend on making important changes to the organisation, however, you may want to consider looking outside the organisation. Leading significant change is a huge challenge and may require an experienced leader who can offer a fresh perspective on your company.
Sourcing, interviewing and onboarding a new CEO is a complex and often lengthy process. That’s when an experienced executive search and recruitment firm can provide invaluable assistance and expertise, helping you to source and narrow down a shortlist of candidates who have a history of executive success and strong cultural alignment.
Recruiting a chief executive
There is no magic formula guaranteeing the future success of a new chief executive. A good understanding of the role, and a well-planned attraction and assessment process, will greatly improve your chance of finding a talented individual who can steer the company into a prosperous future.