More Revealing CEOs
In the wake of the financial crisis, transparency is becoming a priority for a growing number of chief executives.
Six in 10 CEOs said they are disclosing more about their strategy, risks and financial performance, according to a new study expected to be released Tuesday by research firm Oxford Economics. The CEOs cited improved decision-making, innovation and reputation as positive outcomes. The potential downsides, however, included an increased risk of data breaches and a loss in competitive advantage. "Everyone thinks transparency is a good thing, but the struggle is how to do that in a way that adds more value," said Debra D'Agostino, the study's lead researcher.
Seven in 10 CEOs also said investors' emphasis on short-term rewards presents an obstacle to long-term planning, which might involve investing in intangible assets such as talent and intellectual property. The study polled 280 CEOs from public and private firms in 21 countries, in November and December.
The report was jointly commissioned by the American Institute of Certified Public Accountants and the U.K.-based Chartered Institute of Management Accountants.
Move Over M.B.A.s, Here Come the Engineers
Some dispiriting news for business-school graduates: engineers and other technical experts are becoming more prevalent in companies' top ranks, according to two recent studies.
The trend comes as generic titles such as "chief operating officer" are being edged out by more function-specific leaders, such as marketing or research-and-development chiefs, according to a new Harvard Business School working paper that analyzes data from more than 300 Fortune 500 companies.
Over the past two decades, the analysis found, top management teams doubled in size, with most of that growth coming from managers with hands-on expertise in areas such as information technology, marketing and finance. "There's more coordination going on in the c-suite," says Harvard strategy professor Julie Wulf, a co-author of the paper along with two other economists.
Previously, conglomerates would have general managers at the center and each business unit would have its own functional experts. But companies have been narrowing their scope of operations—as illustrated by breakups at ITT Corp., Fortune Brands Inc. and Sara Lee Corp. In newly slimmed-down businesses, oversight of marketing, innovation or other functions can come directly from headquarters.
Engineers and other technical experts are rising in the entrepreneurial ranks, too.
According to a new study of 36 million Facebook profiles, 3,337 company founders and CEOs across all industries hold an advanced degree in engineering, while 1,016 have advanced business degrees. The research was conducted by Identified, a firm that measures individuals' professional presence online. "The demand for engineers is voracious," especially as companies place an increasing emphasis on advanced technology in their products and services, says Brendan Wallace, co-founder of Identified.
HBS's Ms. Wulf says there may be implications for midlevel managers looking to advance their careers, as corporate succession plans might favor functional experts with managerial capabilities, or at least general managers who are willing to cooperate more with their highly specialized suite-mates.