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The rise of the single sector CEO

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CEOs who have always worked in the same sector are increasingly sought by CEO selection panels, research has found.

The 2015 annual Robert Half FTSE 100 CEO Tracker found 62% of the FTSE 100 CEOs appointed in the last 18 months have a history of only ever working in one industry. Prior to this, selection panels chose CEOs with single industry experience just half (51%) of the time. 

The survey found 71% of today’s CEOs move from a senior role in the same industry, while only 18% are serial CEOs from a variety of sector backgrounds. Seven per cent are lifers who have worked their way up the ladder from a junior role.

“The climb to the top job can take different paths, but specific industry experience has proven to be a key consideration for businesses when appointing their chief executive,” said Phil Sheridan, UK managing director at Robert Half. “Combining strong functional and technical knowledge with a deep understanding of the sector and competitive landscape is a sound strategy for motivated professionals looking to advance their careers.”

The analysis revealed there has been significant turnover among senior FTSE 100 executives, with a fifth (21%) of CEOs appointed in the last 18 months. 

It also highlighted slow progress in women taking more top jobs in the UK’s best performing companies. There are now five female CEOs after the appointment of Liv Garfield to Severn Trent and Véronique Laury-Deroubaix to Kingfisher. This is better than in previous years but out of step with improvements at director and senior management level, where women now make up 23.5% of FTSE 100 board members, up from 12.5% in 2011.

The general work histories of today’s FTSE 100 CEOs remain similar to previous years, with 52% having a financial background, 21% in retail/hospitality, 17% in engineering/natural resources, 14% in marketing and 11% in technology.

“Finance has again proven itself to be the route to the top of Britain’s biggest businesses, as the ability to provide strong financial leadership and commercial acumen continues to be a key asset of FTSE 100 CEOs,” said Sheridan. “Professionals with an education or background in finance are highly sought-after by organisations and demand continues to outweigh supply in today’s job market.”