International experience is becoming a must for CEOs

Large companies more often choose a CEO with international experience who has also worked in another sector.

Two out of three executives of the large listed companies in our country gained international experience before being promoted to CEO. Almost half of them have previously worked in another sector. With this versatile path, Belgian top managers distinguish themselves from their colleagues in other countries, according to the ‘Route to the top’ survey by the consultancy firm Heidrick & Struggles among 1,200 CEOs of the largest companies in 27 countries. Heidrick & Struggles helps companies in the search for CEOs.

‘Belgium is a small country, the large companies operate worldwide. That is why it is important that the CEO or CEO can boast international experience through having worked abroad for a period of time,” says Marie-Hélène De Coster, partner at Heidrick & Struggles.

Compared to France, the Netherlands and the global average, Belgium has twice as many CEOs with foreign experience. This concerns both Belgians and foreigners. Of the 20 companies that are part of the Bel20, the star index of the Brussels stock exchange, eight have a CEO with a nationality other than Belgian – five are French.

De Coster points out the advantages of having worked in another sector. ‘Knowledge of your own sector is important. But companies from different sectors face similar challenges, such as digitalization or commitment to sustainable development. Insights into how those challenges are being addressed in other sectors could be useful.”

In our country, the CEO of a large listed company remains in office for an average of about 7 years. More than before, companies attach importance to carefully preparing the succession and they have a list of internal and external candidates ready, says De Coster. That is a task for the nomination committee in the board of directors. Suitable candidates are sent on a course to hone certain talents. ‘A good succession plan guarantees continuity and enables a smooth transition of knowledge between the old and new CEO.’

In 60 percent of cases, the new CEO is found in-house, on average after eight years of service. In 40 percent of large listed companies, preference was given to an external candidate. Only in Ireland is the choice for internal candidates greater.

Nearly one in three executives was previously CEO in another company, and two in ten worked as chief financial officers. Previous experience on a company’s management committee is not an absolute requirement to become CEO, but it helps. In Belgium this criterion carries less weight than in other countries.

‘The CEO is expected less to be the hero, the authoritarian leader, and more to be a conductor who surrounds himself with employees who complement him and from whom he can bring out the best. Flexibility and a willingness to listen have become important qualities of a CEO,” says De Coster.