Evolving role of CEO a challenge to diversity efforts

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Modern C-suites need to balance skills with values, says Billy MacInnes

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25 November 2021 | 0

First the good news: the number of female CEOs in Ireland is more than double the European average. Actually, it’s double the global figure too. It’s also much higher than the UK average. Go Ireland!

What does this mean in actual percentage terms? It means that 14% of Irish CEOs are female compared to only 6% in Europe (and globally) and 8% in the UK. Put another way, one in seven CEOs in Ireland is female.

The source for these figures, the Route to the Top survey by Heidrick & Struggles, notes that the trend to appoint more female CEOs is increasing on a global basis. According to the survey, the share of newly-appointed women CEOs increased from 6% in the last six months of 2020 to 13% over the first half of this year.

 

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While the figure for Ireland is impressive compared to the rest of the world, it needs to be set against the fact that just over half of the Irish population (50.4%) is female. There is still some way to go.

Commenting on the figures, Stafford Bagot, regional managing partner and lead of Heidrick & Struggles Ireland said: “Although the absolute number of female leaders remains low, the trend suggests a move towards more progressive and inclusive policies inside the world’s top companies. There is progress being made but there is more work to be done from a diversity and inclusion (D&I) perspective.”

Ireland was less on trend when it came to non-national CEO appointments, with just under a fifth compared to the European and global averages of nearly a quarter. CEOs in Ireland also tend to remain in post longer than their UK counterparts with an average tenure of 8.8 years compared to 5.9 years across the Irish Sea.

The report found a big increase globally in the share of new CEOs who had held roles in the C-suite beyond the traditional jobs of CFO or COO. The proportion of new CEOs who had held different C-suite roles more than doubled from January 2021 to June 2021, compared to the same period in 2020. Those roles included chief risk officer, chief strategy officer and chief technology officer.

The report states that this could “reflect the increased importance of functions such as technology, risk, or strategy”. But the expansion of the CEO role beyond the day-to-day running of the business could also be a factor.

“CEOs today need to champion (both internally and externally) issues such as sustainability, social justice, DE&I, and cybersecurity, along with other issues specific to their business or geography,” the report notes. “CEOs are in the spotlight more than ever, their actions are scrutinised by a larger number of stakeholders, and they have to be much closer to and transparent with their own employees.”

As a consequence, “leadership capabilities such as agility, empathy, role modelling the organisational purpose, and fostering inclusion matter just as much as specific areas of expertise”.

Returning to the good news, hopefully the trend for increasing numbers of female CEOs (and bosses in general) will continue. It will be heartening when Ireland’s business leaders are asked to don the green jersey in the future to see that a lot of them will come in different sizes than the usual.


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