Why many ASX 200 CEOs have a finance background, but CIOs are a fast-emerging contender
A high level of financial acumen has long been considered an essential quality for CEOs as they steer companies along a path to success in a competitive environment. CEOs with strong financial capabilities can analyse the health of companies, understand the financial ramifications of business decisions, as well as identify the many risks and opportunities that may inhibit or encourage sustainable growth.
It comes as no surprise that the annual Robert Half CEO Tracker reveals nearly half (47%) of all ASX 200 CEOs in Australia have a background in finance.
The number of CEOs with a financial background is falling
Financial acumen will always be essential to the role of CEO as well as identifying the many risks and opportunities that may inhibit or encourage sustainable growth. However, the prevalence of CEOs with a financial background may soon decline. In fact, the number of CEOs with a background in finance has already reduced from 50% to 47% since 2017.
As technology continues to play an increasingly important role in shaping the future direction of Australian companies, our research shows almost nine in 10 (87%) Australian CIOs have their sights set on the top job. Meanwhile, well over one-third (39%) of Australian technology leaders think CIOs are now the main contender for the role of CEO. By contrast, only one in four (25%) of CIOs think the CFO or finance director is next in line for CEO-ship.
Technology’s impact on business strategies
As we move towards a more technology-enabled future, more companies are diversifying their skill-sets so they can navigate changing business dynamics. Today, strategic business decisions are much more likely to be driven by technology and innovation. Advancing technology is not only shaping the way companies conduct business on an operational level, but it presents opportunities to develop new products and enhance customer experiences while finding new ways to reach and connect with their markets.
CEOs of the future will be required to analyse exactly how emerging technologies can contribute to their company’s long-term growth strategy. After all, this isn’t about implementing new technology for the sake of it. Rather, it’s about understanding which technologies are relevant to their business and how they can deliver a strong return on investment for the benefit of shareholders and increased business longevity.
What it takes to be a company’s leading visionary
Business leaders who have their sights set on climbing the corporate ladder will need to focus on developing strong technological acumen – especially as the business world adapts to a rapidly-evolving technology landscape.
But while a specialised background as an IT leader may be crucial to this endeavour, becoming a company’s leading ‘game-changer’ also requires future leaders to demonstrate they can apply their technical expertise in the wider business context.
Many CIOs believe they need to develop their skills further to reach the next stage of their careers. More than half of Australia’s CIOs (53%) say they need to increase their expertise in how different departments can drive growth and sales, while 48% say they need to improve their understanding of different business functions other than IT. Furthermore, 43% of CIOs say they need to develop their commercial acumen and a third (33%) would seek experience in another part of their organisation.
Often the most effective way for CIOs to gain a broad base of skills is through years of experience within an organisation, working across multiple projects and with different stakeholders. Unsurprisingly, internal promotions are common within Australian organisations with as many as 60% of ASX 200 CEOs having been promoted internally.
There’s no doubt Australia’s future CEOs understand that building partnerships across an organisation is not only essential for career progression, but it’s also key to helping businesses maximise overall profitability from digital initiatives. And while finance is still the most crucial skill to master when aspiring to the position of CEO, digital initiatives will play much more of a key role in shaping the future direction of Australian businesses, requiring CEOs to adapt to the changing business market.