S&P 500 Executive Team configurations (it’s finally done!)

CDO chief digital officer chief strategy officer CSO executive team FTSE 100 leadership S&P 500

Back in February I embarked on a new research project, looking at the configuration of executive teams today and how they might change in the future. Working in London, my first thought was to use the FTSE 100 as a data set. Although it generated some interesting results and a lot of conversation (thanks to the many of you who sent me thoughts, involved me in conversations on the topic and so on), the FTSE 100 proved a slightly frustrating set of companies to research.

There were two reasons for this. First, 100 companies represents too small a set to give good coverage on all industries, particularly when the natural slant in the FTSE 100 towards areas such as resources and financial services is taken into account. Second, it turns out that UK listed companies are actually relatively untransparent. Fully a quarter of the UK’s largest PLCs publish no information on their management team, their biographies and their roles. Although I was able to fill in some of the gaps through my own contacts the lack of disclosure of this fundamental aspect of a business’s likely future performance was a surprise.

To expand the data set and thus solve both of these issues I took my brave pills, fuelled up on coffee and embarked on an exercise to classify the executive team configurations of the entire S&P 500. Needless to say that this has been a bit on an effort that has taken nearly four months of fitting in desk analysis and conversations with colleagues around work and raising my now 7-month-old son. It’s amazing how much work you can do on a train on an iPhone!

Some of you may wonder why I did this myself. Couldn’t I have got some of the graduates in the office to do it? Doesn’t this data set already exist? Remarkably, the answer the the second question is ‘no’. Although some sets are available via Bloomberg and similar, they tend to focus in on Executive Officers and the Board of Directors, rather than on the management team and its configuration. Even then, these sets are incomplete and often out of date. The sense I get is that analysts are most interested in the numerical performance of a business and the documented position it is seeking to take rather than the combined capabilities of the people running it and the way that they might interact as a team.

On the question of why do it myself, I decided long ago that I can only really understand a subject by immersing myself in it fully, by pursuing the blind alleys, uncovering its trivia and thus discovering insights for myself. Military strategists might refer to this as the accumulation of experience that allow for fingerspitzengefühl – a natural instinct for what one is seeing that enables faster and more effective reaction… or maybe I just like the process of data gathering and beauty of a large and scarce data set.

Right, musings aside, let’s get down to this. I have a great deal of detailed analysis to do. The diagram below shows the distribution of number of executive team seats in the S&P 500 companies and the FTSE 100. Interestingly, the average number of seats is essentially the same in both – 9.9 seats per business.

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Unsurprisingly, the S&P 500 supports a longer tail of large management teams simply because of the size of the set and the greater transparency that its members display. Less than 10% of S&P companies do not publicly publish the makeup of the management team, versus more than 25% of FTSE 100 companies.

In the weeks and months to come I am going to start to do a number of analyses on the larger set, for example:

  1. Frequency of roles being present on the management team, particularly in the case of fashionable roles such as ‘Chief Digital Officer’ In the case of CDO, I have captured the career history of each of the CDOs in the data set, which I hope will enable me to build a set of typical role profiles for CDO
  2. Cohort analysis by industry, looking at ‘average team profile’ – with such a large set we should assume that we are looking at the best thinking on management configuration of a collection of the best experts in leadership in the world (i.e. the CEOs and Chairpeople)
  3. In doing (1) and (2) build up a taxonomy for the make up of executive teams that will help explain possible future changes in their make up
  4. I have also collected role information and career histories for Chief Strategy Officers across the set, which I hope will give an insight into how the critical function of long term planning is being executed on across the cohort and what leaders are looking for from their CSO
If anyone has particular questions then as ever feel free to ask. I’m really excited to get started on the analysis now… and relieved to have finished the majority of the collection phase!
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