If you were to create a mash-up profile of corporate America's most senior executives, it would unsurprisingly look something like this: A white man in his 50s with an MBA who has switched jobs every four years.
Still, a new study published this week in the Harvard Business Review, which provides a snapshot over time of the demographics and career trajectories of Fortune 100 executives, shows how much the boardroom is definitely changing.
For instance, the majority of these top executives now have undergraduate degrees from state universities, with only a fraction going to college at one of the Ivies. Nearly 11 percent of the top executives are foreign-educated, up from just 2 percent in 1980. And however few women there may be in leadership positions, they actually climbed the corporate ladder faster than men, spending fewer years, on average, in each job and taking a shorter time to get to the top.
The research, an effort by professors from the University of Pennsylvania's Wharton School and IE Business School in Madrid, compiled the backgrounds of the top 10 executives at each Fortune 100 company in 2011. The resulting analysis provides an update to research two of the professors did 10 years ago, which looked at the backgrounds of the same group — those who might be called the most powerful 1,000 people in corporate jobs — in both 1980 and 2001.
"We saw this sharp decline in the lifetime employment model among senior guys," says Wharton professor Peter Cappelli of one of the study's major findings. The percentage of top leaders who spent their entire careers at one company dropped from 50 percent in 1980 to 45 percent in 2001 to less than a third in 2011.
While that drop may be startling, Cappelli says what has interested people most about their study has been the details about where executives got their education. "I was surprised that's been such a remarkably big deal for most folks," Cappelli says. "I guess it's something that makes people think about their children. Anyone with kids is thinking about these roles, and it's an aspect of inequality that's very noticeable to people."
Interestingly, the education backgrounds of top corporate leaders are becoming much more equal over time. In 1980, just 32 percent of leaders went to a public university. By 2001 that had grown to 48 percent, and in 2011 the number reached a majority, with 55 percent of corporate leaders going to state colleges. While the percent of Ivy Leaguers has dropped slightly, from 14 percent in 1980 to 10 percent in both 2001 and 2011, those with degrees from private non-Ivies has plummeted, falling from 54 percent in 1980 to just 35 percent in 2011.
Why are we seeing so many more corporate executives from public universities? More meritocratic corporate cultures could be playing a role, Cappelli notes, but he thinks it's mainly due to history. "It's a bit of an archaeological story," he says. "If you think back to when the executives now went to school, around 30 years ago, it was sort of the...golden era of state universities, which really boomed in the late '60s and '70s. Schools like Michigan and Berkeley — they were building these fabulous campuses, and pulling people in who would have otherwise gone to Ivy League schools."
That's not to say elite schools don't still hold sway among MBA-holders and the very top leaders. If you look at the three most senior executives in each organization (say, the CEO, CFO and chairman), 21 percent have an undergraduate degree from an Ivy League school, compared with 10 percent overall. Additionally, 40 percent of all the executives who hold MBAs got them at one of the top 20 ranked business schools in the country, many of which are at Ivy League universities.
Another way the makeup of the boardroom is changing, of course, is in the number of women. Like other studies before it, the Wharton/IE Business School professors counted the number of women at the top, finding that almost 18 percent of the top jobs were held by women in 2011. That's a massive swing from 1980, when they reported finding no women among the top 1,000 corporate leaders.
More interesting than the stubbornly few number of women at the top, however, was the finding that women are managing to reach the top faster. It took women an average of 28 years to reach the "top-tier positions" (CEOs, vice chairs, presidents and the like), compared with 29 years for men. Women reached "middle-tier" jobs (executive VPs, general counsels, chief marketing officers) in 23 years, compared with 26 years for men. In addition, women were promoted quicker in each of their jobs, at an average rate of every four years, while it took men five.
Cappelli offers three explanations for why this might be. One, he says, could be an explicit effort by companies to get women into top jobs faster. "It's possible that a type of affirmative action is going on," he says. Another could be that the talent pool of women in these executive jobs is simply better. Because we see more women than men change work paths or drop out of the workforce in the middle rungs of their career, he says, it's possible "the women are actually better because they're self-selecting."
Finally, Cappelli suggests, the difference may be due to the fact that there are more women in functional jobs — such as human resources, legal or marketing — for which the technical expertise needed means they're promoted more quickly. In the report, the researchers call it "riding a different elevator."
"If you're going up through a functional track," Cappelli says, "you could be advancing at a very different pace than the folks who are going up through operations jobs" that may require more rotations or longer tenures at each stop along the way.
Another way the boardroom is changing, in addition to adding more women and minorities, is by elevating more foreign-educated executives into a group that was once almost entirely from the United States. Eleven percent of the top 1,000 executives in 2011 were educated abroad, compared with just two percent in 1980. "It seemed to come out of nowhere," says Cappelli of the growth in the numbers. "That's a big change very fast." (Cappelli says they were also likely all foreign-born, but their study can't confirm this.)
Obviously, this varies significantly by company, with large multinationals and companies based on the coasts having more foreign executives than others. More than half the executives surveyed at PepsiCo, Ingram Micro and Philip Morris were educated overseas, the report notes, compared with none at AT&T, Delta Air Lines and Abbott Laboratories.
Such quirks about the leadership ranks at different companies, and what they might reveal about the different corporate cultures, may be even more interesting than the broad-based trends the study found. For instance, the average length of a top Google executive's career is just 14 years (the shortest in the Fortune 100) while at Hewlett Packard and ConocoPhillips, it's 32 years (the longest). Meanwhile, some companies have outstanding male-to-female ratios among the top 10 execs — at Target, Lockheed Martin and PepsiCo, women hold half the senior management jobs — while as of 2011, there were still 17 companies in the Fortune 100 with no women at all among their top 10 leaders.
To Cappelli, this is among the most interesting of the study's results. "They're all just so different," he says. "There's a UPS model, there's a Google model and there's an Exxon model. The idea that there is a corporate model of leadership just doesn't seem to resonate any more."