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What are the shifts in Fortune 500 executive tenures and demographics over the last 10-20 years?
Hello! Thank you for your Wonder request on the shifts in Fortune 500 executive tenures and demographics over the last 10 to 20 years. The short answer is that the average tenure of CEOs has decreased due to the accelerated pace of change of the economy and the CEO’s poor initial corporate performance. Race and gender diversity still remains low for all C-suite executive roles, but has generally been increasing in recent years. Below, you will find a deep dive to my findings.
CEOs
Fortune 500 CEO tenure currently averages 4.6 years, and has been steadily dropping since 2010. This decline is attributed the economy’s “accelerated pace of change”. The business world is also highly critical and unforgiving to a CEO’s poor initial corporate performance. 40% of CEOs have a tenure of fewer than 1.5 years. In 2016, the average age of CEOs was 58 years old. The percentage of female CEOs in 2017 still remains low at 5.4%. However, this figure is the highest in all recent years, and is an almost six-fold increase from 2000. Based on a study, CEOs have attended 283 different public and private colleges, with a majority attaining graduate degrees.
CFOs
Unlike CEOs, there has been a growing trend of Fortune 400 CFO tenure length. The average tenure has increased to 5.9 years in 2013, up from 4.9 years in 2008. However, the turnover rate has increased as well, from 11% in 2011 to 15% in 2012. In 2016, the average age of CFOs is 53 years old. The percentage of non-white CFOs is low at 3.4%.
COOs
Fortune 500 COOs are fading from the business view, with CEOs taking up increased responsibilities and management capacity. Though COOs in Fortune 500 companies are still valuable, the percentage of Fortune 500 companies with a COO has declined from 48% in 2000 to 36% in 2014.
DIRECTORS
The average director age has decreased since 2007, to about 62 years old. Average tenure has remained consistent in recent years, at slightly over 9 years. The percentage of female directors has is about 20%. The majority of corporate directors in 2011 were white males at 74.4%, with low representation from non-White males and females.
CONCLUSION
In conclusion, racial and gender stereotypes still remain strong, with a strong majority of C-suite executives being White males in their 50s or 60s. However, there has been a gradient increase in diversity, including more female and non-White in Fortune 500 boardrooms.
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