www.epsenfuller.com
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Global Reach
Local Expertise
Industry Specialists
Our clients recognize the need to reevaluate their traditional approach toward attracting the leaders of tomorrow. Now,
more than ever, a highly talented senior leadership team, with a broad spectrum of diversity in terms of thought, experience
and perspective, is a prerequisite for success in a changing, global marketplace.
IMD International Search and Consulting, founded in 1972, is among the top 20 global search organizations by revenue,
with more than 40 offices and 175 consultants in 24 countries, all providing instant access to a world-class executive talent
pool serving the global economy.
The partners of IMD – operating through a matrix structure – organized by geographic and industry specialization – are ideally equipped to satisfy the talent acquisition requirements of those organizations seeking to acquire and retain high impact
executives. Our global presence spans The Americas, Asia-Pacific, Europe, and the Middle East, enabling us to service
companies around the world – covering all the major industry sectors.
Our clients, whether large or small, global or local, benefit greatly from this structure as we have access to the most relevant
resources and relationships wherever they may exist.
Albert Hiribarrondo
President,
IMD International Search and Consulting
Commitment to Quality
Speed of Execution
Transparency of Process
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Executive Summary
When viewing the landscape of senior management in today’s global organizations, we are alarmed to find C-level turnover
continuing its torrid pace as the financial market’s growing turmoil and the significant risk of worldwide recession appears
to have had a direct impact on executive management departures.
Indeed, independent research shows that senior management turnover figures for Q1 2008 show increases for the three key
categories as follows: 55 percent for CEOs, 11 percent for CFOs and 10 percent for other C-level management. This is on
the heels of record setting C-level turnover in 2006, which recorded an increase of 68 percent in turnover over 2005, while
2007 figures maintained this blistering pace1. The primary factors behind the continuing high executive turnover numbers
remain as follows:
• Corporate performance and its relationship with the key executives in charge
• The rising complexities of business in general
• Growing domestic and international competition
• Increasing market instability
Clearly the high rate of turnover of CEOs, as well as other high level executives across all industries, underscores the
need to gain competitive advantage by accelerating the innovation process, sharpening sales and marketing execution and
increasing the ability to respond to rapid market change.
There is strong indication that many organizations are under pressure for talent at various levels in the organization and the
current talent shortage is only expected to be more severe in the coming years.
In confluence with this increasing need for innovation and creative management is the pending retirement of a high percentage of our senior management executives. The oldest of the massive baby boomer generation (nearly 80 million in
North America alone) are set to reach their 65th year – traditional retirement age – in the year 2011. The following generations – the “baby bust generation” (or ‘Generation X’) and the “echo boom” (or ‘Generation Y’), are not as plentiful,
with most governmental and labor board statistics showing an upcoming 40 percent shortfall in workforce numbers across
all developed nations. So, the question remains, where will tomorrow’s leaders come from, and how are today’s management boards changing and adapting to position their organizations to meet this talent shortfall and maintain competitive
advantage?
IMD International Search and Consulting sought to answer these questions by conducting this survey to highlight “The
Changing Face at the Top.” An in-depth study of the changing demographics of the “C-Suite” (the Chairman/CEO and
executive management team) of the Global 2000 and other influential companies throughout the world, this research highlights some alarming trends, points to the need for greater awareness, and is a call to action for today’s corporate leaders to
build bench strength across the senior executive ranks.
1
US statistics provided by Liberium Research
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Senior HR Executives shared their insight on the demographic make-up
of their senior management teams, as well as trends regarding talent
demand and acquisition, diversity, and succession planning.
Here are just a few of the results we found worthy of note in our survey:
• The baby boomer generation dominates the executive committee with over two-thirds representation;
yet we found it promising that 32 percent of the executive committee members are from Gen X and Gen Y,
those aged below 45.
• While perhaps not surprising that only 20 percent of all executive committee members are female, it is astonishing
that nearly one-half of our respondents report that they had no females whatsoever among their executive
committee members.
• Internal management development seems to be falling short when supplying the senior ranks; nearly one-third
of CEOs, 30 percent of COOs, and a surprising one-half of all CFOs were hired from outside the organization.
• At the same time, 26.4 percent believe the C-Suite will increase in the number of foreign nationalities on their
management team, indicating continuing globalization of business across all regions.
• While 78 percent of respondents believe that diversity is an important strategy a mere 14 percent reported
having a Corporate Diversity Officer, and an even lower 13 percent believe the number of minorities in the
executive suite will increase over the next three years.
• Nearly two-thirds of respondents agreed that talent acquisition is among the top three concerns at the board level,
but it doesn’t seem to be getting any easier; almost 80 percent stated that talent acquisition is more difficult today
than three years ago, indicating an ever shortening supply of superior talent.
With the C-Suite in the process of undergoing some of the most significant, and possibly most influential, changes in the
past several decades, the survey studies the changing face at the top of these organizations – the executive committee – with
an in-depth look at the shifting demographics within senior management.
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The Changing Face at the Top
General Background
The pool of corporate HR leaders that we addressed included those from the Global 2000, as well as market leading companies in
terms of revenue and market influence throughout 24 countries worldwide. A total of 378 respondents submitted answers to our
survey within a three-week time frame in March 2008. In terms of geographic distribution, the respondents are headquartered
around the globe, in Europe, the Americas, and Asia Pacific.
Country of Origin
The largest number of respondents was from Europe, followed
by North America and the Asia-Pacific area. The breakout of
the survey results by region was as follows: 43.6 percent from
Western Europe and 21.2 percent from Eastern Europe, for a
Chart #1
total European response of 64.8 percent; 27.4 percent from
Chart #1
Chart #1
North America; 5.4 percent from the Asia-Pacific area; and
less than 1 percent each from South America and Africa.
In order to get a fully accurate view of the changing demo-
Region of Company HQ
Region of Company HQ
Region of Company HQ
Western Europe
Western
Eastern Europe
Europe
Western Europe
Eastern Europe
Asia
Eastern Europe
Asia
Americas
Asia
Americas
Africa
Americas
Africa
Africa
graphics among global organizations, it was important to not
only have a wide representation of countries, it was vital to
have representation from organizations with varying sales
revenues and numbers of employees, as well as from a broad
range of industry sectors.
Chart #2
Industry Representation
Chart #2
Chart #2
We sought to have a broad cross-section of industries as well,
as demonstrated in the corresponding chart.
survey covered a broad cross-section of company sizes. The
majority – 51.2 percent – fell in the less-than-$1 billion category. Of those, 31.4 percent reported revenues of less than
Chart #3
$250 million. But there was also strong representation
Chart from
#3
Chart #3
organizations with larger revenues: 23.3 percent reported
sales revenues of $1 to $5 billion, and 17 percent reported
sales revenues of $5 to $50 billion. In the largest sales revenue category, 8.5 percent reported sales revenues of more
than $50 billion.
EFA_IMD Catalog _062608_SinglePage.indd 5
20
30
(% of Total)
20
30
20
30
(% of Total)
(% of Total)
25%
20%
25%
20%
15%
20%
15%
10%
15%
10%
5%
10%
5%
0%
s
er
on
ces
ial
ces
5%
ice
um
cti
en
str
rvi
0% Serv
Se s nstru n Cons r Indu l e Sci s
l
s
s
a
e
e
s
e
e
a
f
i
o
o
c
c
i C
ic ne
ri i
m
ti
0%
nc
an
ust lL cie s
ervuseis Serv es struc on onsu er
Fin ial S B
ic ess rvic on cti
Ind stria ife S ence
C sum
v
r
c
C tru
du L ci
on
an Se sin Se
l
In terms of total sales revenues, the results indicated that the
10
10
10
40
40
40
50
50
50
Industry Sector Representation
Industry Sector Representation
25%
Industry
Sector Representation
Fin ncia
a
Fin
Total Company Revenue
0
0
0
Bu ness
si
Bu
ns
Co
eS
C
In
10
10
10
15
20
(% of Total)
15
20
15
20
(% of Total)
Lif
m
dia
om
Me
elC m
T
a
i
d &
m
Meechia lCo m
T d Te m
Me h & lCo
e
c
Te & T
ch
Te
Revenue in USD
Revenue in USD
Revenue
> $50 B in USD
$10 B>- $50
$50 B
B
> $50 B
$10
$5 B
B -- $50
$10 B
B
$10 B - $50 B
$5$1BB- $10
- $5 B
B
$5 B - $10 B
$1 M
B -- $5
$250
$1 B
B
$1 B - $5 B
$250 <M$250
- $1 M
B
$250 M - $1 B
< $250 M
< $250 M
0
0
0
5
5
5
(% of Total)
25
25
25
30
30
30
35
35
35
Number of Employees
Number of Employees
Number
of Employees
> 100,000
Chart #4
25,000>- 100,000
100,000
> 100,000
25,000
5,000- 100,000
- 25,000
25,000 - 100,000
6/27/08 9:56:42 AM
25%
20%
Chart #2
15%
10%
5%
0%
a
Fin
s
ice
erv
lS
ia
nc
ss
ine
s
Bu
ces
rvi
Se
n
tio
ruc
nst
Co
r
me
nsu
Co
l
ria
ust
Ind
e
Lif
ces
ien
Sc
dia
Me
c
Te
h&
m
om
lC
Te
The Changing Face at the Top
Revenue in USD
> $50 B
Number
$10 B - $50 of
B Employees
Chart #3
B - $10was
B
The$5same
true in terms of number of employees. In the smallest categories, 30.9 percent of respondents reported an employee
$1 B - $5 B
count of up to 1,000, and 22.6 percent reported an employee total of 1,000 to 5,000. In the larger categories, 26.1 percent reported
$250 M - $1 B
an employee
< $250 M count of 5,000 to 25,000 and 14.4 percent had 25,000 to 100,000. In the largest category, 6.1 percent reported an employee count 0of more
sizes creates a responding environment that covers a full variety
5 than10100,000.
15 This
20 broad
25 range
30of company
35
(% of Total)
of potential C-Suite situations, sizes and environments, leading to some interesting findings throughout this survey.
Ownership Structure
Number of Employees
29.10%
> 100,000
25,000 - 100,000
Chart #4
49.60%
Employee Owned
Chart #5
5,000 - 25,000
Private Equity
1,000 - 5,000
Privately Held
< 1,000
0
5
10
15
20
(% of Total)
25
30
35
16.10%
Publicly Traded
5.20%
Ownership Structure
Number of Countries Outside HQ
Public/Private Ownership
29.10%
49.60%
Moving beyond revenues and employee totals, we thought it was just as important to show a cross
section of public and private
Employee Owned
14.9%
23.7%
companies. The survey findings showed an almostChart
even
split between private and publicly held companies – 49.6NONE
percent were
#5
Private Equity
publicly traded and 16.1 percent were held by private equity, with the balance being fully privately owned. These figures
1 - 5 helped
Chart #6
Privately Held
6 - 10
contribute to a diverse group of influential factors affecting the C-Suite, particularly company policies dictated by ownership
type,
Publicly
11Traded
- 50
which could have possibly affected individual company policies and plans
at the executive level.
16.10%
5.20%
29.1%
22.8%
9.5%
> 50
Level of Global Operations
The survey results represent a broad range of multi-national
organizations, with the vast majority of respondents reporting regional operations outside their headquarters country.
In fact, more than 76 percent reported operations outside of
Chart #6 optheir headquarters country, with 22.8 percent reporting
Chart #7
erations in up to five countries outside of their headquarters
country, and nearly 15 percent reporting operations in more
than 50 countries.
Number of Countries Outside HQ
Regions of Operations Outside HQ
14.9%
23.7%
None
NONE
South America
1-5
North America
6 - 10
Middle East
Western Europe
11 - 50
Eastern Europe
29.1%Asia Pac
0
> 50
22.8%
Africa 9.5%
10
Breaking it down further revealed a broad range of regions
20
30
40
(% of Total)
50
in which participating companies had other operations. Leading that grouping was Eastern Europe with 43.7 percent, Western Eu-
Regions of Operations Outside HQ
rope with 39.9 percent, Asia-Pacific with 33.9 percent and North America with 30.4 percent. Other areas with significant presence
Percent
Noneof Sales Outside HQ Country
included South America, Middle East, and Africa.
South America
North America
Chart #7
Chart #8
EFA_IMD Catalog _062608_SinglePage.indd 6
35.40%
Middle East
36.20%
Western Europe
< 20% of Sales
Eastern Europe
Asia Pac
21 - 50% of Sales
Africa
0
10
20
30
> 50%
40 of Sale
50
6/27/08 9:57:08 AM
Regions of Operations Outside HQ
Number of Countries Outside HQ
14.9%
None
23.7%
South America
NONE
1 - Chart
5 #7
Chart #6
6 - 10
The Changing Face at the Top
Asia Pac
Africa
> 50
22.8%
9.5%
Middle East
Western Europe
Eastern Europe
11 - 50
29.1%
North America
0
10
20
30
None
35.40%
South America
36.20%
North America
Middle East
< 20% of Sales
Chart #8
Western Europe
50
Percent of Sales Outside HQ Country
Regions of Operations Outside HQ
Chart #7
40
(% of Total)
21 - 50% of Sales
Eastern Europe
Asia Pac
> 50% of Sale
Africa
0
10
20
30
(% of Total)
40
50
28.40%
So it is clear that, with only 7.9 percent of respondents reporting no operations outside their HQ country, organizations with global
Percent of Sales Outside HQ Country
operations dominated our respondents, regardless of size of company. In a further demonstration of the global nature of our respondents, we see a full 35.4 percent generate over 50 percent of their revenue outside their HQ country, with an additional 28.4 percent
35.40%
36.20%
generating between 20 percent and 50 percent. This is another indicator of the importance of global diversity, cultural awareness
Chart #8
< 20% of Sales
and a multiplicity in perspective within the executive
suite, and indeed throughout the workforce.
21 - 50% of Sales
> 50% of Sale
Sizing Up28.40%
the C-Suite
As we begin to dig into the demographic makeup of the
senior executive committees of these global organizations, we
looked closely at determining factors such as age, nationality,
gender and advanced education.
Chart #9
Chart #9
Age
Age Range
Range of
of Executive
Executive Committee
Committee Members
Members
40.0%
40.0%
30.0%
30.0%
20.0%
20.0%
10.0%
10.0%
Age
When studying the ages of the executive committees of these
0.0%
0.0%
organizations, the baby boomer generation clearly dominates
Ages
Ages 61
61 &
& Over
Over Ages
Ages 51
51 -- 60
60
Ages
Ages 45
45 -- 50
50
Under
Under 45
45
the executive committee with a full 67.6 percent makeup
among the baby boomer generation ages 45 and up, or those
born between the years of 1948 and 1963. There is, however,
some promising news in that a full 32.4 percent of the executive committee members are Gen X and Gen Y ages, those
aged below 45.
Chart #10
Chart #10
Nationality
We asked respondents for the number of different nationalities
Number
Number of
of Nationalities
Nationalities Among
Among
Senior
Senior Executives
Executives
60%
60%
40%
40%
20%
20%
0.0%
0.0%
11 Nationality
Nationality
22 Nationalities
Nationalities 33 Nationalities
Nationalities
44 or
or More
More
among their executive committee members. Results show
Number
Number of
of Females
Females on
on Executive
Executive Committee
Committee
EFA_IMD Catalog _062608_SinglePage.indd 7
3.10%
3.10%
9.90%
9.90%
4.70%
4.70%
None
None
11 Female
Female
6/27/08 9:57:27 AM
Age Range of Executive Committee Members
40.0%
60%
30.0%
Chart #9
20.0%
Chart #10
10.0%
0.0%
Number of Nationalities Among
Senior Executives
The Changing Face at the Top
40%
20%
Ages 61 & Over Ages 51 - 60
Ages 45 - 50
Under 45
0.0%
1 Nationality
2 Nationalities 3 Nationalities
4 or More
50 percent of our respondents reporting only one nationality within the executive committee, while another 19.3 percent reported
two
nationalities.
Showing signs of
possibly taking steps in overcoming the executive committee diversity challenge are the 30.7
Number
of Nationalities
Among
Number of Females on Executive Committee
Senior
Executives
percent
of respondents
who reported three or more nationalities on the executive committee.
3.10%
60%
Chart #10
Gender Composition
40%
Chart #11
4.70%
None
1 Female
9.90%
2 Females
When studying the gender makeup within the executive committee, it is disturbing to see that less than one-third of all respondent
3 Females
20%
organizations reported two or more females on their entire executive committee. Further to this, 22 percent reported
only one fe4 Females
13.10%
0.0%
male senior executive, while an astonishing 47.2 percent of all HR executives polled reported that they had no females
whatsoever
> 4 Females
1 Nationality
2 Nationalities 3 Nationalities
among their executive committee members.
4 or More
Number of Females on Executive Committee
3.10%
Chart #11
4.70%
9.90%
1 Female
(% of Respondents)
Percent of Females Among the Top Three
6.80%
10.90%
CEO
2 Females
Chart #12
13.10%
22%
None
47.20%
22%
47.20%
3 Females
CFO
4 Females
COO
> 4 Females
9.90%
(% of Respondents)
There’s no doubt that women have progressed considerably among our global workforce, especially over the last few decades. Yet,
Percent of Females Among the Top Three
despite reports that women are breaking through the “glass ceiling,” it appears that, at the time of this survey, the ceiling is just
6.80% Results showed a slow and insignificant upward movement of females into the top spots.
“slightly
cracked” rather than “broken.”
10.90%
Chart #12
Only 6.8 percent had made it to the CEO spot, only
9.9 percent to the CFO position, and 10.9 percent to the COO role. Again,
CEO
these numbers do not bode well for the advancement of women into the C-Suite, but an annual look at this category will truly show
which direction the trending is moving.
CFO
COO
9.90%
Advanced Education Disparities
Additionally, results showed a vast disparity in the number
of the women senior executives holding advanced degrees
versus their male counterparts. For instance, 45.3 percent of
Chart #13
the female executive committee members hold a Masters
in
Business Administration (MBA) or business school degree,
whereas 87 percent of their male counterparts hold a MBA
or business school degree.
Advanced Education Disparities
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
MBA or
Business
School Degree
Advanced
Technical
Degree
PhD, MD
Female
Male
JD, Doctorate
of Law, Other
Certification
As further evidence of the disparity in advanced education among male and female senior executives, 18.5 percent of women within
the executive committee hold an advanced technical degree, whereas their
maleExecutive
counterparts Tenure
come in at 64.4 percent. In looking at
Senior
35.0%
30.0%
Chart #14
EFA_IMD Catalog _062608_SinglePage.indd 8
25.0%
20.0%
15.0%
CEO
CFO
6/27/08 9:57:44 AM
Advanced Education Disparities
Advanced
Education Disparities
MBA orFace at the Top
The Changing
90.0%
Chart #13
Chart #13
80.0%
70.0%
90.0%
60.0%
80.0%
50.0%
70.0%
40.0%
60.0%
30.0%
50.0%
20.0%
40.0%
10.0%
30.0%
0.0%
20.0%
the executive committee members holding a Ph.D. or medical degree, women land at
only 11.7 percent
while men
Female
Male
10.0%
percent. Finally, the survey results also showed that 22.2 percent of the0.0%
females hold a JD, a Doctorate of Law or
Female
certification, whereas the men are over 50 percent.
Senior Executive Tenure
Senior Executive Tenure
Advanced Education Disparities
Much has been written about the shortened “life-span” of
MBA or
90.0%
today’s
senior executives. Turnover at the CEO, Business
CFO and
80.0%
School Degree
Chart #14
70.0%
COO
levels are at an all time high. We chose to look at other
Chart #13
Advanced
60.0%
Technical
Chart
#14
50.0%
areas
such as executive tenure, which continues to
present
Degree
40.0%
30.0%
a problematic
situation among today’s global organizations.
PhD, MD
20.0%
10.0% reviewing
When
0.0%
Male
Business
School Degree
MBA or
Business
Advanced
School Degree
Technical
Degree
Advanced
Technical
PhD,
MD
Degree
JD, Doctorate
PhD,
MD
of
Law,
Other
Certification
come
in
at 41.5
JD, Doctorate
of Law, Other
other
advanced
Certification
the number of years that the
JD, Doctorate
top
three
of Law, Other
Certification
Female members have
Male held their current
executive committee
Senior
Executive Tenure
35.0%
30.0%
35.0%
25.0%
CEO
30.0%
20.0%
25.0%
15.0%
CFO
CEO
COO
CFO
20.0%
10.0%
15.0%
5.0%
10.0%
0.0%
5.0%
0.0%
< 1 Year
1 - 3 Years
3 - 5 Years
> 5 Years
< 1 Year
1 - 3 Years
3 - 5 Years
> 5 Years
COO
positions, results showed that an alarming 41.5 percent of CEOs had been in their position three years or less, with 17.6 percent
having been in their position less than a year. The alarming numbers
carried through
the rest Ascention
of the C-Suite with 48 percent of
Internal
vs. External
CFOs
and 46.4
percent Tenure
of COOs having held their positions three years
or less.vs. External Ascention
Senior
Executive
Internal
35.0%
Internal
vs. External Ascension
30.0%
Chart #14
25.0% highlighting the C-Suite turnover issue,
Further
20.0%
filled internally or externally.
15.0%
10.0%
5.0%
According
to survey results, nearly one-third of
0.0%
80.0%
70.0%
60.0%
80.0%
Internal
50.0%
Promotion
70.0%
Chart #15
40.0%
60.0%
as well as succession planning,
are the statistics on executive positions being
Internal
CEO
30.0%
50.0%
Promotion
Chart #15
External
20.0%
Hire
40.0%
CFO
10.0%
30.0%
External
COO
0.0%
20.0%
Hire
CEO
10.0%
today’s CEOs and approximately
30 percent ofCFO
COOs have COO
come from outside
0.0%
< 1 Year versus
1 - 3 Years
3 - 5 Years
> 5 Years
CEO the gap isCFO
COO
their organization
an internal
promotion.
In the CFO role within corporations,
even more significant
with a
nearly 50/50 split, further highlighting today’s executive turnover as a pressing issue.
Successor Identified
Internal vs. External Ascention
Chart #15
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Successor
Identified
80.0%
Chart #16
Internal
Promotion
Chart
#16
External
Hire
CEO
CFO
COO
70.0%
60.0%
80.0%
50.0%
70.0%
40.0%
60.0%
30.0%
50.0%
20.0%
40.0%
10.0%
30.0%
0.0%
20.0%
10.0%
0.0%
Successor
Identified
Successor
Identified
No
Successor
CEO
CFO
COO
CEO
CFO
COO
No
Successor
Perhaps these findings are a result of recent legislation such as Sarbanes-Oxley in addition to Board pressure on performance “in
Successor Identified
the now” in corporations across the globe.
Chart #16
80.0%
70.0%
Yet,
in all cases, only 30 percent
60.0%
50.0%
roles of CEO, CFO and COO.
40.0%
30.0%
20.0%
10.0%
0.0%
CEO
EFA_IMD Catalog _062608_SinglePage.indd 9
CFO
of survey respondents indicated that they have an identified successor in place for those top three
Successor
Identified
No
Successor
COO
6/27/08 9:57:48 AM
The Changing Face at the Top
Nationality Differential Percentage
A Closer Look at the Top Three
CEO
Different
Nationality
When reviewing the diversity makeup of executive committee members, specifically the top three executive officers, we
find that
as HQ
Chart #17
CFO are of a nationality different than the country in which
approximately 20 percent of each of the CEO, CFO and COO populations
their headquarters are based.
Same
Nationality
as HQ
COO
0% 20%
40% of60%
100% of CFOs and
However, less than 10 percent of that group is of an ethnic minority. Specifically,
9.2 percent
CEOs,80%
9.9 percent
only 8.1 percent of COOs are considered an ethnic minority.
Ethnic Minority Percentage
Nationality Differential Percentage
CEO
Chart #17
Different
Nationality
as HQ
Chart #18
CFO
Same
Nationality
as HQ
COO
CEO
Ethnic
Minority
CFO
Not Ethnic
Minority
COO
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
Ethnic Minority Percentage
Corporate Diversity Strategies
Trends & Opinions
90.0%
80.0%
70.0%
Ethnic
60.0%
After carefully studying these demographics, we asked
a
number
of
questions
to analyze the change in
Minority
50.0%
Chart #19
CFO
40.0%
the demographic makeup of their executive committees over the past three
30.0% years, versus the change that
Not Ethnic
20.0%
they
anticipate in those same demographics over theMinority
next three years. Additional
perspectives regarding
COO
10.0%
0.0%
strategy on succession planning and talent acquisition provided insight into some
interesting trends.
Corporate
Corporate
0% 20% 40% 60% 80% 100%
Diversity Officer
Diversity Policy
in Place
in Place
CEO
Chart #18
Women and Minorities Increasing?
While we found a significantly low number of women fill roles in the senior executive suites, we are
“We desperately
need all the talent
we have and Yes
can get,
so ethnic background,
No
gender and cultural
diversity, etc. must
Increasing Sr.
Executive
all Diversity
be pursued
is Important
aggressively.”
– Mid-Cap Finnish
Industrial Manufacturer
Diversity
Strategy
Implementation
Corporate
Diversity
encouraged
to note
that 28.2Strategies
percent of all respondents said that number
has increased
over
the last
three
years. In addition, the nationalities among executive committee
members have been diversified
80.0%
90.0%
80.0%
70.0%
60.0%
50.0%
Yes
30.0%
20.0%
10.0%
0.0%
No
among
70.0% 32.5 percent of our respondents, providing a better understanding
60.0% for the worldwide markets that they serve. Yet we find
Chart #19
Yes
a disappointingly
low number, less than 10 percent,
have
among ethnic minorities in the senior executive
50.0%
Chart
#20 increased representation
40.0%
40.0%
ranks.
30.0%
No
20.0%
10.0%
0.0%
Has the Executive
Committee
over
Corporate
Corporate Changed
Increasing
Sr. the past 3 Years?
Diversity Officer
in Place
Diversity Policy
in Place
Executive Diversity
is Important
Number of Women vs. Men
Number of Foreign Nationalities
Number of Ethnic Minorities
Diversity Strategy Implementation
80.0%
70.0%
60.0%
50.0%
Chart #20
40.0%
EFA_IMD Catalog _062608_SinglePage.indd 10
30.0%
Increased
Decreased
No Search
Change
Adopted
a Strategy Adopted
a Strategy
Requires
to Increase Upper
to Increase
Firms to Present a
Management Diversity C-Suite Diversity
Diverse Slate
28.2% 9.2%
62.6%
9.8% 3.7%
86.5%
32.5% 1.8%
65.6%
Yes
No
6/27/08 9:57:50 AM
The Changing Face at the Top
Looking ahead at the upcoming three years, 31.3 percent of our respondents forecast an increase in the number of women entering the executive ranks. Regrettably, however, we only find that 12.9 percent believe that the number of ethnic minorities making
up the executive suite will increase over the next three years.
Do you Have Plans to Change the Face of the Executive
Committee over the next 3 Years?
Nationality Differential Percentage
Number of Women vs. Men
CEO
Chart #17
CFO
Number of Foreign Nationalities
Increase
Decrease
No Change
31.3% .60%
68.1%
12.9% 1.2%
85.9%
26.4% Number of Ethnic Minorities
COO
1.8%
71.8%
Different
Nationality
as HQ
Same
Nationality
as HQ
Growth in Diversity Acceptance?
0% 20% 40% 60% 80% 100%
Another potential trend is the emergence of corporate diversity officers. As we saw previously, with less
...better decisions from
more open debate;
better understanding
of markets being
served; greater
appreciation for
Ethnic
similarities
rather than
Minority
differences...these are
Not Ethnic
the positives
we see in
Minority
our diversity program.
than 10 percent responding that they have an ethnic minority member on their executive committee and
just under 13 percent stating that they expected that number to rise, it is no
Ethnic Minority Percentage
“Diversity brings in
different points of view
and information from
different markets,
giving us a chance to
use different cultural
experiences, which
is very important for
a company operating
in an international
environment.”
– $20B German
Transportation Company
surprise that a very low number, 14.2 percent, indicated that their organization has a corporate diversity officer. The trend may be in favor of increasing
CEO
diversity as nearly 43 percent of our respondents indicated that their orga#18
CFO
nization currently has Chart
a corporate
diversity
policy that endorses workforce
diversity as a fundamental core value.
COO
20% 40%
80% 100%
Further, an astoundingly high percentage of our 0%
respondents,
77.7 60%
percent,
– North American
Telecommunications Leader
felt that increasing diversity at the senior executive level is important.
Will this lead to more corporate diversity officers, or even an increase
in corporate diversity?
Specifi-
cally we asked respondents if their
Chart #19
companies had adopted strategies
to increase upper management and C-Suite diversity.
Corporate Diversity Strategies
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Yes
No
Corporate
Diversity Officer
in Place
To the strategy adoption question, 71.4 percent of respondents
said there were no strategies in place to increase diversity at
Corporate
Diversity Policy
in Place
Increasing Sr.
Executive Diversity
is Important
the upper management level, while 76.8 percent said the same for the C-Suite levels. To be clear, in some countries local legislation
discourages any proactive inclusion policies, if not making such activities
blatantly Strategy
illegal. While
it’s obviously best to seek the most
Diversity
Implementation
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
superior talent at any level, these restrictions
“Diversity supports the philosophy of an open and inclusive
culture, gives breadth and depth to opinions
Chart #20and perspectives,
and expands the awareness of the workforce.”
– European Food and Beverage Producer
EFA_IMD Catalog _062608_SinglePage.indd 11
can lead to difficulty in developing corporate
Yes
strategies to increase diversity at any level
in
the organization.
Adopted a Strategy Adopted a Strategy
to Increase Upper
to Increase
Management Diversity C-Suite Diversity
No
Requires Search
Firms to Present a
Diverse Slate
6/27/08 9:57:53 AM
Corporate Diversity Strategies
Chart #19
However, in what might be viewed as a glimmer of hope,
41 percent of our respondents pointed to a potential strategy as they indicated that they actively seek search partners
who target a diverse slate of candidates.
Chart #20
We believe that a broader candidate pool of both women
and diverse executives of all types in the C-Suite will enhance diversity of perspective, thought and decision-mak-
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Yes
The Changing Face at the Top
No
Corporate
Diversity Officer
in Place
Corporate
Diversity Policy
in Place
Increasing Sr.
Executive Diversity
is Important
Diversity Strategy Implementation
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
ing processes, and competitive advantage. Those organi-
Yes
No
Adopted a Strategy Adopted a Strategy
to Increase Upper
to Increase
Management Diversity C-Suite Diversity
Requires Search
Firms to Present a
Diverse Slate
zations that nurture diversity of
“The discussions
(among the senior
management) about
talent are far more
important than the
forms and the
presentation of data.”
thoughts and ideas being exchanged in a workplace, will be more connected to the rapid changing
global marketplace, better able to adapt to the speed of those changes, and more able to compete and
win in an increasingly competitive global market.
Talent Shortage & Succession Planning
“Even if succession
planning is a top
talent shortage, difficulty in finding top-level talent, and the potential imconcern, it is still
– $50 billion Global
pact of the Baby Boomer retirement, which all developed countries are
considered as a
Electronics Company
theoretical exercise
facing today. It is clear that finding talent isn’t getting any easier, as an
instead of a pragmatic
overwhelming majority, 78.9 percent, of our HR executives responded that
exercise, at least at the
Talent
is More
talent acquisition is more difficult today than
threeAcquisition
years ago, indicating
an or Less
top level… Senior
Difficult than 3 Years Ago
ever-shortening supply of superior talent.
management needs to
21.10%
own the succession
planningMore
process and
And while 63.2 percent indicated that their organizations
engage in proactive succession planning,
Chart #21
Difficult
learn to navigate it.”
a disappointingly low 43.7 percent felt that succession planning was making a tangible and positive
When discussing the importance of talent acquisition, we delved into the
impact on their talent quotient in preparation for the pending retirement, or even unexpected departure,
of its top management.
78.90%
Succession Planning
Talent Acquisition is More or Less
Difficult than 3 Years Ago
70.0%
60.0%
21.10%
50.0%
More
Chart #22
Difficult
Chart #21
Less
Difficult
78.90%
Succession Planning
70.0%
60.0%
EFA_IMD Catalog _062608_SinglePage.indd
12
50.0%
– Top-TierLess
International
Difficult
Banking & Financial
Services Company
Yes
40.0%
30.0%
No
20.0%
10.0%
0.0%
Organization Engages in
Believe Succession Planning
Proactive Succession Planning
is Adequate
Boomer Retirement Will Increase
Severity of Talent Shortage
34.20%
6/27/08 9:57:57 AM
Less
Difficult
78.90%
Talent Acquisition is More or Less
Difficult than 3 Years Ago
Succession Planning
The Changing Face at the Top
70.0%
60.0%
21.10%
More
Chart #22
Difficult
Chart #21
Yes
40.0%
30.0%
No
20.0%
Less
Difficult
Boomer Impact
50.0%
10.0%
0.0%
Organization Engages in
Believe Succession Planning
is Adequate
“The market is
shrinking now, and to
would further increase the severity of the executive talent shortage.
survive you have to
deliver new value.
While
the Baby Boomer
effect is very real worldwide, and much has been
discussed
in recent years
over
Succession
Planning
Boomer
Retirement
Will
Increase
Where does new value
Severity
Talent Shortage
the 70.0%
importance of talent acquisition, particularly at the top of the house,
we find itofsomewhat
disturbing
come from? It does
60.0%
not exist inside the
that only 11.4 percent of our respondents consider talent the number one34.20%
issue concerning the C-Suite
50.0%
company. You get that
Yes
Executives.
Of course there is the potential for talent acquisition to increase in importance as Board presYes
40.0%
Chart #23
from outside.”
30.0%
Proactive
At the same time, nearly two thirds of78.90%
our respondents said they believed that the
babySuccession
boomerPlanning
retirement
Chart #22
sure mounts, further shortening senior executive tenure beyond
its already historically low levels.
No
No
20.0%
10.0%
0.0%
On a positive
note, a full
62.3
of survey
respondents indicated that talent acquisition at the top of
Organization
Engages
in percent
Believe Succession
Planning
Proactive Succession Planning
is Adequate
the house is one of the top three issues that concern the executive committees today.
Boomer Retirement Will Increase
Severity of Talent Shortage
65.80%
Talent Acquisition
34.20%
Yes
Chart #23
– Mid-Tier European Media
Services Company
Chart #24
No
65.80%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Yes
No
Talent Acquisition is the
Number 1 Issue
Talent Acquisition is a
Top Three Issue
Talent Acquisition
90.0%
Lessons
Learned
Chart #24
80.0%
70.0%
60.0%
As50.0%
the survey results indicate, a deficit in superior talentYesand a retiring Baby Boomer population is a
40.0%
critical
30.0% issue facing global organizations today. We believe
No CEOs and management boards must make
20.0%
talent
acquisition a top priority, if not their number 1 priority, which will greatly improve their odds for
10.0%
0.0%
success. There
are a number
of strategies
thatis can
be deployed, many of them not new, yet most not
Talent Acquisition
a
Talent Acquisition
is the
Top Three Issue
Number 1 Issue
fully exploited to the benefit of the organization:
“…the CEO should
demonstrate a
vigorous support for
the cause.”
– Global Pharmaceutical
Giant
• Proactive Bench Building
• Succession Planning Driven From the Top
• Building a True Talent Brand
• Expand the Talent Pool through Increasing Diversity
• Creating a Culture that Makes “Employer of Choice” a Critical Corporate Value
• Adopting and Implementing a Diversity Policy, Endorsed and Signed by the CEO
EFA_IMD Catalog _062608_SinglePage.indd 13
6/27/08 9:58:00 AM
The Changing Face at the Top
Clearly many of our respondents feel that the talent shortage has worsened in recent years, and believe
“To meet the diverse
needs in the global
market, you need to
have diversity in the
composition of your
employees…
a homogeneous group
can only come up with
something
homogeneous.”
– Big 3 Japanese
Automotive Company
it will continue in severity. The real question remains, what strategies are being adopted to expand the
talent pool? Are the ranks of females and members of minority groups potential pools of previously
untapped talent? And perhaps even more vexing, how do we tap into and develop that talent today in
order to seed the boardrooms of tomorrow?
When speaking of diversity, there are numerous reasons above and beyond expanding the potential
talent pool, as to why this makes sense, including:
• Developing a better understanding and increase market share among multi-cultural customers
• Creating a corporate reputation as being socially responsible
• To encourage diversity of thought and perspective among the workforce
• To enhance the organization’s reputation as an “employer of choice” among the diverse population
The macro-economic perspective and the dynamic business cycles of the ever-shrinking global community also come into play.
As search consultants, we have been able to observe a certain development over the past five to seven years: whereas the late
1990s were characterized by the need to “fill seats,” perhaps even at the expense of a thorough and exhaustive search for the best
possible talent, over the last several years attention has shifted to finding, attracting and retaining the best and brightest. This shift
obviously has a significant impact on the senior management profiles for which we search and underscores the need for corporate
credibility as a talent brand in order to be successful.
Finally, we share with you some other opinions and insights offered by our respondents:
“We have transformed our internship program dramatically. Out of over 5,000 applications, we select 50-60 interns who are
given meaningful assignments with regular exposure to senior leaders. Forty percent of our interns are people of color and we
were recognized as one of the top entry level employers…”
~ $10B+ Global Consumer Goods Company
“To accommodate organizational needs and culture shifts is important, it is absolutely critical that a strong foundation be in
place for succession planning to work effectively… elements of the process must include competencies, strategic fit assessments
and clear-cut high potential definitions.”
~ North American Financial Services Company
“I can only see a positive impact; diversity leads simply to greater results through better understanding of global markets and
ability to develop better business plans and strategic vision. Working on a diverse team leads to happier employees who add
much more value to the overall team.”
~ International Express Delivery Company
“...managing the diverse cultural backgrounds is hugely underestimated even in a highly international organization…”
EFA_IMD Catalog _062608_SinglePage.indd 14
~ Global Telecommunications Leader
6/27/08 9:58:02 AM
International Search and Consulting
Austria
Japan
THOMAS STUMMER
EXECUTIVE CONSULTING
+ 43 1 2308529 0
www.ts-ec.eu
HUMAN ASSOCIATES GROUP
+ 81(3) 5512 6408
www.haigjapan.com
Belgium
ARGOS BELGIUM
+ 32 2 346 18 55
www.argos.be
BOARD OF DIRECTORS
Brazil
POTENCIAL RH S/C LTDA.
+ 55 11 3093 2717
www.potencialrh.com.br
President
Albert Hiribarrondo (France)
[email protected]
Canada
DANIS PATTERSON BROWN
+ 1 416 922 5600
www.dpbexecsearch.com
Czech Republic
Korea
MCKINNEY CONSULTING INC.
+ 82 2 725 3830
www.mckinneyconsulting.com
Mexico
AF CONSULTORES, SC
+ 52 55 5568 8866
www.imd-search.com
Netherlands
QUAESTUS
+ 31 73 615 47 00
www.quaestus.nl
Norway
BUBENIK PARTNERS
+ 420 261 218 506
www.bubenikpartners.cz
Headfield Executive Search
& HR Consulting AS
+ 47 22 56 01 11
www.headfield.no
Denmark
Poland
PHOENIX CONSULTING GROUP A/S
+ 45 70 260 220
www.phoenixconsulting.dk
EXECUTIVE NETWORK
+ 48 22 616 40 70
www.executivenetwork.pl
Sherilyn Shackell (UK)
Finland
Spain
IMS TALENT
+ 358 9 694 0044
www.imstalent.com
NEXUS NOVO EXECUTIVE SEARCH
+ 34 91 435 69 29
www.nexus.es
Peter Sutter
France
Sweden
SIRCA EXECUTIVE SEARCH
+ 33 1 44 55 33 55
www.sirca.fr
LISBERG
+ 46 40 664 29 00
www.lisberg.se
Germany
Switzerland
DR. HEIMEIER & PARTNER
+ 49 711 780 76 0
www.heimeier.de
GUIDO SCHILLING & PARTNER AG
+ 41 1 366 60 60
www.guidoschilling.ch
Hungary
Turkey
TELKES TANACSADO RT.
+ 36 1 488 0848
www.telkes.hu
MELLAART INTERNATIONAL
+ 90 216 369 69 90
www.mellaartint.com
India
United Kingdom
INX GROUP
+ 91 22 24960623
www.inxglobal.com
HIGHFIELD HUMAN SOLUTIONS
+ 44 (0) 1635 33923
www.highfielduk.co.uk
Italy
United States
MCM SELEZIONE
+ 39 02 760 20 115
www.mcmselezione.it
EPSEN FULLER/IMD
INTERNATIONAL SEARCH GROUP
+ 1 973 359 9929
www.epsenfuller.com
Executive Committee
Thomas J. Fuller (USA)
[email protected]
[email protected]
[email protected]
Directors
Jan Bubenik (Czech Republic)
[email protected]
Zsolt Lukacz (Hungary)
[email protected]
Indrani Mukerjea (India)
[email protected]
EFA_IMD Catalog _062608_SinglePage.indd 15
6/27/08 9:58:12 AM
We are very grateful to the many individuals who shared their organizational information,
thoughts and experiences with us and thus contributed to the interesting findings of this survey.
Headquarters
Ten Park Place
Suite 420
Morristown, NJ 07960
973-359-9929
New York Office
230 Park Avenue
Suite 1000
New York, NY 10169
212-551-1734
San Francisco Office
One Embarcadero Center
Suite 500
San Francisco, CA 94111
415-773-2819
www.epsenfuller.com
EFA_IMD Catalog _062608_SinglePage.indd 16
6/27/08 9:58:12 AM