Dive Brief:
- The age at which CEOs are appointed has jumped during the past two decades as companies facing an increasingly complex and turbulent economy put a higher value on diverse experience, according to a paper published by the National Bureau of Economic Research.
- The average age of CEOs in the U.S. shot up 10 years from 2000 until 2023, five times the increase in average age for the college-educated workforce, according to the researchers. At their appointment date, CEOs today have held a larger number of positions across more firms and industries than their counterparts in 2000, they said.
- “Demand for generalist skills in response to greater industry-level uncertainty and complexity has causally contributed to the appointment of older CEOs,” the researchers said. “The shift toward generalist human capital reflects the growing demand for skills that enable coordination, adaptation and decision-making under uncertainty,” they said.
Dive Insight:
For most older U.S. workers, ageism persists across the U.S. workplace, according to AARP.
Nearly 2 in 3 workers (64%) aged 50 or older report seeing or experiencing age discrimination in the workplace, with 22% saying they feel that because of their age their employers are trying to push them out of their job, AARP said in a January report.
Older workers feel they face subtle forms of age discrimination, including assumptions they resist change and are less tech savvy than their younger colleagues, AARP said.
Many older workers see younger co-workers gaining preference for training or feel they do not receive recognition for their accomplishments, according to AARP.
Yet in the highest echelons of leadership at U.S. companies, age is less of an impediment to advancement, according to the NBER research.
The average age of CEOs at their appointment date jumped from about 47 in 2000 to 55 in 2023, the researchers said, citing data from LinkedIn and BoardEx.
Several changes are driving the embrace of executives with longer careers and more diverse experience, including an increasingly murky economic landscape, the researchers said.
“Second, the CEO role has become more complex, as evidenced by firms simultaneously expanding across geographies and business lines while navigating a growing set of regulatory constraints,” they said.
“These forces can lead firms to seek leaders with generalist skills, which are more closely tied to accumulated experience than to raw ability,” the researchers said. “As executives require longer career paths to build such diverse capabilities, firms appoint older CEOs.”
Smaller companies seeking a CEO especially favor executives with experience at other companies, the researchers said.
Compared with large companies, “smaller firms offer fewer opportunities to accumulate generalist experience internally and rely more heavily on external hiring,” they said.