The share of newcomers in CEO positions has reached 40%, and the share of women has almost tripled

In 2022–2023, Russian companies are faced with a much more massive change of leadership than before – due to sanctions, new requirements for management competencies and the departure of some top managers abroad. As a result, as follows from the report of the KFR consulting group, the share of newcomers in CEO positions has reached 40%, and the share of women has almost tripled. A survey of major companies showed that they began to more often look for new managers among their employees – this indicates the increased importance of internal personnel reserve programs.

Since the start of the Russian military operation in Ukraine until June 2023, CEOs have changed in more than a quarter (28%) of Russian companies. In 2022 alone, 19% of all CEOs were replaced – and this figure is extremely high for this segment of the labor market, as noted in the “Russian CEO Index” study by the KFR consulting group (formerly Korn Ferry Russia). It is based on a survey of managers of the 105 largest companies in the Russian Federation by capitalization.

Over the past seven years, a similar level was reached only in the pandemic year, which was extremely difficult for companies in 2020 (20%). “These crises required both great endurance and “reassembly” of business from companies and their CEOs,” notes KFR managing partner Anton Storozhenko. Although the economic situation improved somewhat in the first half of 2023 (according to Rosstat, GDP growth was 1.6% after a fall of 2.1% in 2022), companies continued to look for new leaders.

The study notes that in 63% of cases, the change in management was unplanned – that is, it occurred before the expiration of the contract by the decision of the company, the CEO himself, or under the pressure of external circumstances. In a third of cases, such a decision was made due to sanctions imposed on the CEO or shareholder, less often – on the company itself.

Although the majority of newly appointed CEOs already had similar management experience, the share of those who found themselves in this role for the first time is quite high – 40%. This may indicate both that companies are faced with fundamentally new problems that cannot be solved by CEOs with a traditional set of competencies, and that in this narrow segment of the labor market there is also a shortage of personnel, caused, among other things, by the departure of many managers abroad (for more details, see “Kommersant” dated May 25).

For a stable economic situation, a level of 40% is disharmonious – normally the share of debutants is up to 30%, notes Oksana Morsina, managing partner of RosExpert. At the same time, she says, it is important to distinguish between when there has been a real change in the top person in companies, and when there has been a structural reshuffle associated, for example, with sanctions risks. In the second case, the business may continue to be managed by the previous manager, although formally the position of CEO is occupied by another person.

With the increase in the share of debutants, it is impossible to talk about a significant rejuvenation of the position of the general director – the average age of the CEO now, like three years ago, is 52 years. At the same time, a gender shift has been noted – in an attempt to overcome the personnel shortage, companies have turned to a category of employees that previously often remained unclaimed when distributing high-level positions. Although the share of women among large business leaders now remains low (2.8%), compared to 2020 (1%), it has almost tripled. The same trend, as Kommersant previously wrote, was recorded by personnel analysts for mass personnel – after the start of partial mobilization, companies began to offer vacancies to women more often (see Kommersant, November 19, 2022). Gender stereotypes influence the choice of managers less and less, agrees Leonid Koen, partner at Odgers Berndtson Russia, noting that the most common functional positions from which future CEOs grow for women are the positions of financial director and marketing director. “In the future, gender ratio statistics will become less meaningful because a successful CEO is primarily determined by the set of competencies that can achieve results,” he notes.

According to the survey, to find a suitable candidate for the role of a new leader, companies most often turned to internal hiring – in 2023 it became the source of 71% of appointments, in 2020 it accounted for 66%. The most “internal” candidates were selected in the industrial sector – 79%, the least – in finance (50%). When hiring internally, this position is filled by employees either from top positions in the company or from the position of CEO of another company in the group – in these cases, the average period from joining the company to the appointment of a CEO is almost 10 years. Strengthening the role of internal hiring, according to Oksana Morsina, will push companies to form a “reserve bench” – a personnel reserve. Nowadays, business owners are often forced to promote employees to management positions who are not yet sufficiently prepared for the new role.

Anastasia Manuilova