The changing characteristics of DAX CEOs - a survey

A Survey of Germany’s top CEOs
Personal skills gaining in significance / Greater understanding of core business required

Odgers Berndtson’s Frankfurt office has compared the CVs of the CEOs of the 30 DAX companies from the years 1988 and 2008 as part of a current survey and asked the DAX supervisory board members about the skills required by future CEOs. Along with corresponding experience in the operative business, personal skills will play a greater role for the appointment of CEOs in the future.

According to the results of a survey carried out by Odgers Berndtson among the CEOs and supervisory boards of the 30 DAX companies in the first six months of 2009, on average the CEO of tomorrow is 52 years old upon appointment, has a university degree in economics, engineering or natural sciences, supplemented by an additional qualification in strategic business management and job experience abroad. He/she has a high level of customer orientation and achieved operative successes in the core areas of the company. At the same time, he/she has pronounced management skills such as employee orientation and motivation, as well as social competence and team capability.

“The growing complexity of our economy and wide variety of business risks call for an ever deeper understanding of the core business – even at executive board level,” said Patrick Schild, Partner at Odgers Berndtson, commenting on the results of his survey. “The true hurdles in the future, however, will be the personal skills and characteristics of a CEO. Based on the experience from the crisis, greater emphasis will be placed in the future on aspects such as modesty, integrity and sustainability for the appointment and monitoring of a CEO.”

Strategic business management qualification ever more important

When the DAX was founded, nearly half of all CEOs had a law degree and 23% did an economics degree. This ratio has reversed over the last 20 years. In 2008, only about 19% of the CEOs had studied law whereas 35% had studied economics. At the same time, doctorates are being replaced by post-graduate qualification. While 68% of the CEOs had a doctorate in 1988, this figure had fallen to 55% by 2008. In comparison, the percentage of CEOs with an MBA has risen from zero to 23%. “In view of the decreasing half-life of knowledge, CEOs in future will have to have a high degree of willingness for lifelong learning. For this reason, the need for an additional qualification in strategic business management will rise in the future,” explains Schild.
 
Well-founded business experience and long-term company service

Less than 30% of the DAX CEOs in 2008 had undergone a change of sector during their professional career. At an average of 1.42, the number of different companies where CEOs had been employed prior to their appointment, was equally low. Consequently, the majority of CEO candidates are groomed for the position internally. The percentage of internally recruited CEOs amounted to 84% in 1988. In 2008, the percentage had fallen but still remained at a high at 77%.

Marketing & Sales experience on the rise

In contrast, there has been a considerable change in the corporate divisions where the candidates were employed prior to their appointment. In 1988, more than half of the top managers came from the Finance division, nearly 30% were active in the Operations division and only 16% had a managerial position in Marketing & Sales. By 2008, the significance of the Finance division had declined to 39%. Today, around 26% of the DAX CEOs come from corresponding managerial positions in Marketing and Sales.  

Survey manager Schild added: “Despite the continuing economic crisis, which naturally draws more attention to the finance division within a company, the surveyed supervisory board members believe that the chief financial officer (CFO) will no longer be the natural born “crown prince” in the future. Instead, the “road to the top” will be more dependent upon the core business, the customers and the respective business situation.”

Methodology

An analysis was made of the CVs of all CEOs in the 30 DAX companies for the years 1988 (1st July) and 2008 (31st December). As the CEO position was held by two people in one of the companies in both 1988 and 2008, a total of 62 CVs were compared. On the basis of the empirical results, all supervisory board members in the DAX companies in the 1st quarter of 2009 were surveyed on the necessary skills and competencies of future CEOs.

A sample of the survey “CEO in 20 years: A Survey of the Profiles of Dax CEOs 1988 – 2008 – 2028” can be  requested from: presse@odgersberndtson.de