A new survey by Study.EU shows that 28 per cent of India’s top CEOs have an MBA, though 72 per cent of them hold a Master’s degree in some other field, while all of them have a Bachelor’s degree.
The survey looks at the CEOs of the largest public companies on each continent as per the Forbes Global 2000 company ranking of 2017. In total, the resumes of 231 CEOs were analysed. The analysis considered a candidate’s highest academic degree, whether they studied abroad (meaning at least one semester of university-level education), their age, gender, and nationality.
Globally, 97 per cent of the sample holds at least a Bachelor’s degree; 64 per cent at least a Master’s degree or equivalent (including MBAs); and 10 per cent holds a doctoral degree.
It also shows that 32 per cent of the world’s top CEOs did part of their university studies abroad.
Studying abroad
The data reveals a clear trend toward more international experience and diversity among CEOs: when looking only at the youngest third of the sample, the share of CEOs who studied abroad increases significantly to 41 per cent, and the share of foreign nationals rises to 27 per cent.
This trend is expected to continue in the future, as student mobility in the general population has increased dramatically over the past few years. That implies that future generations of CEOs are even more likely to have studied abroad than today’s top managers.
Surprisingly, although most of the world’s global players are US-based, among all CEOs in the sample, the Americans have the least international experience: Only 11 per cent studied abroad, the lowest number for any region in the sample.
Africa has the largest percentage of CEOs who have studied abroad with 65 per cent, the highest value for any region in the dataset, followed by Central and South America (41 per cent), Australia (30 per cent), and Europe (36 per cent). Only 19 per cent of Indian CEOs have studied abroad.
Foreign nationals
Meanwhile, 18 per cent of the leaders are foreign nationals, with Australia having the highest share of 43 per cent, followed by Europe with 36 per cent. In India, 3 per cent of CEOs are from other countries.
“Studying abroad is one of the best ways to get to know foreign cultures and different perspectives,” says Study.EU CEO Gerrit Bruno Blöss. “While international study and work experience can’t replace actual diversity, it enables top management teams to look at strategic challenges from different points of view. Of course, this is true at all hierarchy levels of a company, not just in the boardroom.”
Diversity in the boardroom
The CEO post remains generally male-dominated: only 3 per cent of CEOs are women, all of them in the US or in India. Of the 231 participants, 225 are men and only six are women. Four of them head US-American companies, and two lead Indian companies.
Studies have found a strong correlation between the diversity of executive or advisory boards and the financial performance of companies, especially with regards to gender diversity. The rationale is that diversity allows teams to approach problems from various perspectives, avoiding the risks of a “yes men” herd mentality. Of course, this is true on any level within an organisation, and not just the top leadership.
Although it is no replacement for actual diversity in teams, studying abroad is a great way for individuals to leave their comfort zone, get to know foreign cultures and concern themselves with new perspectives at a young age. That is one reason why top managers who studied overseas are generally in high demand for important positions.