Hiring the most qualified candidate for the role of CEO will depend on how accurate and attractive your CEO job description is.
Amongst the selection criteria, education and experience stand out as the most important factors alongside less tangible (but highly important) considerations such as personality, integrity and cultural match.
Deciding which consideration is of foremost importance, however, is never easy. We’ve all heard the story of the young genius who vaulted their way to the top job without a degree. But it’s also relatively rare, especially in Australia where research by the Robert Half CEO Tracker found that 85% of ASX 200-listed CEOs hold an undergraduate degree.*
The truth is that there is no truly right or wrong answer when it comes to weighing up education versus experience. But there are still lots of clues that you can gather to build up a picture of which of these factors matters the most to your CEO recruitment process.
Is a degree important?
In Australia, a strong educational background will certainly help to open doors on the way to the top job. In fact almost a quarter of CEOs hold an MBA (24%). By contrast, 13% of Australian CEOs do not hold an undergraduate degree, and 41% don’t have a postgraduate degree.
The most popular undergraduate degrees amongst ASX 200-listed CEOs include the Bachelor of Commerce, Bachelor of Engineering and Bachelor of Science.
Length of career
Along with a strong educational background, a capable CEO will be able to demonstrate wide and varied experience in business, plus a proven track record of success. As such, successful CEOs are most often seasoned professionals who have acquired knowledge, wisdom, and sound judgement over time.
Areas of experience
Running a profit and loss (P&L) operation, managing a budget, and setting a strategic vision are generally considered critical prerequisites to reaching the top job.
Accordingly, over half (43.5%) of Australian CEOs have prior experience in finance, showing the value of being able to crunch the numbers that drive revenue and keep expenses under control.
Another important area to consider in your CEO job description is technology, which is reshaping innovation strategies and opening the door for new products, services and business models. Currently, just 10.5% of CEOs have industry experience in technology. Chief executives don’t have to hold a postgraduate degree in computing or understanding coding to lead digital transformation efforts. They do, however, need to be able to keep track of digital innovations and recognise the possibilities and opportunities they present.
59% of the ASX 200-listed CEOs have worked internationally/have international experience. Amongst the most popular regions include North America, Europe and the Asia-Pacific.
Along with a solid educational background and ample business experience, CEOs need to be able to embody the personal qualities that underpin success in the role. They need to set the strategy and future direction of the business, while being accountable to shareholders and the board of directors. Hence, they need to be clear communicators who are capable of both giving direction and accepting expert opinion. They must be energetic, calm under pressure, and objective, all while having the creative ideas needed to give the business a competitive advantage.
Looking to hire executive leadership talent? Contact Robert Half Executive Search for a recruitment solution.
A CEO job description requires balance
Getting back to the question of education versus experience, it would appear that both are certainly important factors on the path to becoming a chief executive.
But while a degree is a good first step on the road to a successful business career, there is no substitute for a strong and diverse track record of management experience and delivering outstanding business results.