U.K. Companies Looked Outside to Fill Top Ranks Last Yearby
PwC says 58 percent of CEO hires were external in 2015
Women still under-represented among top company roles
Large U.K. companies are increasingly appointing chief executives officers from outside rather than promoting insiders, research from PwC showed on Tuesday, though the firm said the trend is producing mixed results.
PwC said U.K. companies appointed outside candidates to 58 percent of available CEO posts in 2015, compared with 23 percent worldwide. It was the highest percentage for the U.K. since the firm began the survey on CEO succession in 2004.
Turnover among U.K. executives is also among the highest worldwide, with 19.3 percent of these posts changing hands last year. Only Brazil, Russia, India and Japan recorded higher percentages.
Though external CEO hires appear to have delivered higher returns for shareholders in recent years at companies worldwide, they are under-performing in the U.K., PwC said. This raises concern over succession planning at British companies, the firm said.
“Boards of directors following well thought-through succession plans should have a deep bench of strong, internal candidates,” Gary Neilson, a principal at Strategy&, PwC’s strategy consulting business, said in the report. “When the company needs to make transformational changes, boards should factor the outsider option into their succession planning.”
Only 3 percent of incoming CEOs in the U.K. last year worked at the same company for their entire career, compared with a global average of 26 percent. The study covered the 300 largest publicly traded companies in the U.K. and the top 2,500 worldwide.
The survey also showed that U.K. companies named women to only two of 44 CEO roles available last year, down from five out of 47 positions in 2014.