NCPA - National Center for Policy Analysis


November 17, 2004

Corporate leadership in the United States is more diverse than ever, with more women and non-Ivy league graduates filling the ranks. Additionally, the rise to the top is faster for today's executives and requires holding fewer jobs along the way. A new paper from the National Bureau of Economic Analysis details just how much things have changed and why.

The authors analyzed the executive leadership of Fortune 100 companies from 1980 to 2001. They find that the makeup of executives has changed considerably:

  • In 1980, the Fortune 100 featured no women executives, while in 2001, 11 percent were women; meanwhile, the average age has dropped from 56 to 52 over the same timeframe.
  • In 1980, 14 percent of Fortune 100 executives attended an Ivy league institution for undergraduate education and only 32 percent attended public or state-sponsored schools.
  • By 2001, only 10 percent had Ivy League pedigrees while almost half -- 48 percent -- had attend public institutions.

Additionally, the path to corporate success has changed as well:

  • Executives of 2001 were much less likely to have spent their entire career at the same company than their 1980 counterparts.
  • Instead of focusing on heavy promotion from within the firm, Fortune 100 companies are now more inclined to hire executives from outside the company.
  • Furthermore, top executives average tenure dropped by almost 5 years -- meaning that people are getting promoted faster.

The authors believe that the early 1980s represented a severe break in corporate culture. A severe recession, a wave of deregulation, intensified global competition and new shareholder demands for better financial performance required corporate restructurings. To meet these challenges, companies had to break from the "Organizational Man" approach or fail.

Source: Matthew Davis, "The Changing Path to Corporate Leadership," NBER Digest, November 2004; based upon: Peter Cappelli and Monika Hamori, "The Path to the Top: Changes in the Attributes and Careers of Corporate Executives," National Bureau of Economic Analysis, Working Paper No. 10507, May 2004.

For text

For abstract


Browse more articles on Economic Issues