Canadian CEOs have more global experience but growth rate slows: Russell Reynolds Associates survey



    Does corporate Canada have what it takes to compete globally?

    TORONTO, Sept. 9 /CNW/ - 37 per cent of Canadian CEOs have international
work experience compared with only 25 per cent 20 years ago, but the rate of
increase has slowed in the past 10 years, according to a study commissioned by
Russell Reynolds Associates, a premier global executive search and assessment
firm. The study, released today, is the first in a series of papers that
examines how the globalization of the Canadian economy impacts the
competencies sought in CEOs, succession planning and the professional
development of the senior executives of Canada's largest firms.
    Over the past 20 years, Canada's largest companies have become
significantly more global. Overall, foreign imports and exports equalled
62 per cent of the country's GDP in 2007, compared to 43 per cent in 1987.
    International work experience is one indicator of the global orientation
that many boards are looking for in their senior leadership teams. Yet,
despite the nearly 50 per cent increase in Canadian CEOs with international
work experience between 1987 and 2007, the rate of the increase has slowed.
Between 1987 and 1997, there was a 28 per cent increase in the percentage of
CEOs with international work experience. Between 1997 and 2007, however, that
increase declined to 16 per cent.
    The study, conducted by researchers at King's University College and the
Richard Ivey School of Business at the University of Western Ontario examined
the international experience of the CEOs of Canada's 100 largest for-profit
corporations, whose revenues of more than $718 billion are equal to
approximately 55 per cent of the country's Gross Domestic Product. The study
sample was restricted to companies headquartered in Canada; subsidiaries of
foreign corporations were excluded. In order to identify trends over time, the
study examined CEO international experience in 1987, 1997 and 2007.
    "Few companies are untouched by the increasing globalization of our
economy and findings of this study indicate that the boards of Canadian
companies are responding by evaluating what competencies are required at the
helm," said Shawn Cooper, Country Manager, Russell Reynolds Associates.
"However, this is a race without a finish line and complacency is not an
option. Canadian firms must continually examine the extent to which global
markets, competition and supply chains figure into their current and future
business strategies, and adjust their cultural alignment, senior management
succession planning, recruiting and professional development strategies
accordingly."
    "Research suggests that the ability of a CEO to operate at a global level
is greatly enhanced by having prior global work experience," said Trevor
Hunter, co-author of the study and Associate Professor at King's University
College at the University of Western Ontario. "If the current trend holds,
Canadian firms risk having an inadequate pipeline of executives with the
necessary global experience and breadth of perspective to succeed in the
global marketplace."
    A sector-specific breakdown of the study's data found that in the 1987 to
1997 period, Canadian financial services and consumer-focused companies
markedly increased their appointment of CEOs with international experience.
Today, a financial services CEO is nearly twice as likely to have
international work experience as twenty years ago (even with a 16 per cent
decline from ten years ago), and a consumer CEO is more than two and a half
times as likely. The international work experience of CEOs in the industrial
and natural resources sector, which had already been relatively global before
the events of the late 1980s, rose less significantly over the last 20 years
and actually declined somewhat between 1987 and 1997.
    The study also examined where that international work experience was
taking place. The results reflect the growing globalization of Canadian
business. The United States is by far Canada's largest trading partner, but
Canadian executives are increasingly looking to gain experience in different
regions. At the same time, emerging markets represent new competition from
countries that are rapidly developing strategies to leverage their resources
on the global stage.
    This increasing importance of markets outside the United States is
reflected in the survey data: in 1987, executive postings in the United States
accounted for 62 per cent of foreign postings of at least one year in
duration. By 2007, that figure had decreased by half to 31 per cent, while
postings to the rest of the world had risen to 69 per cent.
    The length of time that CEOs have spent working in other countries is
also on the rise, and more CEOs have experienced multiple foreign work
assignments, according to the study. From 1987 to 2007, the percentage of CEOs
who have had two or more foreign postings more than tripled to 21 per cent,
and the percentage who had had four or more postings increased from a
negligible 1 per cent to 6 per cent. The average number of postings for CEOs
who had at least one foreign posting increased from 1.4 in 1987 to 2.0 in
2007, reflecting a deeper contribution to the CEO's international executive
perspective and competencies.
    As the length of cumulative time spent in foreign roles has increased, so
has the responsibility of those positions. While earlier postings largely
consisted of lower-level assignments, today's CEOs are more likely to have
spent the international portion of their careers in substantive
decision-making roles that broaden their executive-level perspectives and
competencies. In 1987, the most common job a CEO would have had during an
international posting earlier in his or her career was a lower-ranking,
functional role. A decade later, the most common international job was at
mid-level product or service management. By 2007, most Canadian CEOs who had
worked abroad had done so in a senior, general management capacity.
    "There are many excellent CEOs and senior executives who do not have
international work experience but this study suggests that given the need to
look beyond Canada's mature markets for business growth, the slowing rate of
Canadian CEOs with global experience could be cause for concern," said Mr.
Cooper. "While today international experience is still somewhat of a
differentiator in evaluating CEO and senior management candidates, a decade
from now we fully expect it to be a required competency."

    To obtain a copy of the survey, please visit:
http://www.russellreynolds.com/thought.asp

    About Russell Reynolds Associates

    Leadership. In today's ever changing global business environment, success
is driven by the talent, vision and leadership capabilities of senior
executives.
    Russell Reynolds Associates is a leading global executive search and
assessment firm with more than 300 consultants based in 39 offices worldwide.
Our consultants work closely with public and private organizations to
identify, assess and recruit senior executives and board members to drive
long-term growth and success. We value teamwork, serving our clients with a
collaborative approach that spans our international network of sector and
functional experts.
    Our in depth knowledge of major industries and our clients' specific
business challenges, combined with our understanding of who and what makes an
effective leader ensure that our clients secure the best leadership teams for
the ongoing success of their businesses. For more information, please visit us
at www.russellreynolds.com.





For further information:

For further information: Or, to obtain a copy of the study or to request
an interview, please contact: Gillian McArdle, (416) 342-1813,
gillian@mediaprofile.com; Tonique Harry, (416) 504-8464,
tonique@mediaprofile.com

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